China News: Spring Festival Buying in Gold Has Begun

"Selling like crazy", gold fever re-emerges on the eve of the Spring Festival. Is it the right time to stock up on gold?

Beijing Business Daily 2025-01-23 13:22

As the Spring Festival of the Year of the Snake approaches quietly, the festive atmosphere spreads in the streets and alleys, and the gold market also heats up, ushering in the annual sales peak season. Recently, a Beijing Business Daily reporter visited a number of gold sales stores in Beijing and found that with the Spring Festival approaching, major stores have launched promotional activities, with gram weight reduction and consumer rebates emerging in an endless stream. Not only that, bank deposits have also caught the "express train" of this wave of sales boom and are also favored by consumers. In the face of this wave of gold craze, analysts remind that a prudent attitude should be adopted when facing gold investment. For example, when gold experiences a technical correction, it can be considered to purchase in installments and batches to diversify risks. It should not blindly chase high prices or invest in gold through borrowing and leverage to avoid unnecessary financial risks.

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Gold jewelry sales are booming

As the Spring Festival approaches, gold prices remain stable. On January 23, London gold (spot gold) opened at $2,755.97 per ounce, and as of press time, it was at $2,749.94 per ounce. Just one day ago, on January 22, the main contract of Shanghai gold rose above 645 yuan per gram, setting a new historical high. London gold (spot gold) reached a high of $2,763.27 per ounce during the session.

Driven by the rise in gold prices and the festive atmosphere, the price of pure gold jewelry has also risen. On January 23, the prices of pure gold jewelry announced by gold jewelry brands such as Chow Tai Fook, Chow Sang Sang, and Lao Miao all exceeded 830 yuan per gram. However, Beijing Business Daily reporters visited many gold sales stores in Beijing and found that in order to attract consumers, major brands have launched various promotional activities, which has reduced the actual purchase cost.

At a Chow Tai Seng gold store in Beijing, a salesperson said, "During the Spring Festival, you can enjoy a discount of 100 yuan per gram, which will last until February 4. The current promotional price is 658 yuan per gram, and labor costs are not included." In addition to launching gold purchase discounts, this store also launched a trade-in benefit. Consumers can bring their old gold jewelry to the store and convert it into a corresponding amount according to the gold price of the day to buy new gold products without paying additional depreciation fees.

A marketing poster at the entrance of a Chow Tai Fook store reads, "Selected jewelry is 30% off." The salesperson said, "Buy gold below 20 grams and get 25 yuan off per gram, and above 20 grams and get 40 yuan off per gram. The discounted gold price for products below 20 grams is 808 yuan per gram, and above 20 grams is 793 yuan per gram. The promotion lasts until February 4." In terms of product types, the store counter displays a variety of snake-themed gold products, including delicate and small snake-shaped pendants, unique snake-patterned bracelets, and cute cartoon snake-shaped gold ornaments, which are deeply loved by young consumers.

"If it is for investment purposes, it would be more appropriate to buy gold bars," the salesperson suggested. In the physical gold bar investment area of ​​the store, there are many snake-shaped physical gold bars on display. These investment gold bars do not include labor costs, and the price per gram is about 730 yuan. China Gold also launched a 100 yuan discount per gram event. In the store, many consumers were selecting their favorite gold products. The gold bracelet and bracelet display area was also crowded with consumers. "Buy gold products for more than 1,000 yuan and get another 200 yuan discount. After the discount, the gold price is 678 yuan per gram, and labor costs are not included," said the store salesperson.

When buying gold products, in addition to paying for the gold itself according to the weight of the gold and the gold price at the time, you also need to pay the processing fees incurred in making the gold products. The level of labor costs usually varies according to factors such as the complexity of the gold product's craftsmanship, the difficulty of production, and the brand. The more complex the craftsmanship and the higher the difficulty of production, the higher the labor costs; some well-known brands may also have relatively high labor costs for gold products due to factors such as brand premium. For example, a certain gold bracelet weighs 10 grams, the basic gold price of gold on that day is 700 yuan per gram, and the labor cost of the bracelet is 120 yuan per gram. When buying this bracelet, the cost of gold itself is 700×10=7000 yuan, and the labor cost is 120×10=1200 yuan, and a total of 8200 yuan needs to be paid.

Wang Hongying, president of the China (Hong Kong) Financial Derivatives Investment Research Institute, pointed out that the Spring Festival is a traditional Chinese festival and a peak period for consumption. People tend to buy gold during the festival, not only as exquisite jewelry gifts for relatives and friends or for personal use, but also as an investment option that can preserve or even increase its value. Therefore, the eve of the Spring Festival is an ideal time to buy gold, which is very popular among the public, whether for decoration or investment purposes.

The marketing enthusiasm of Jicunjin remains high

Since last year, gold prices have experienced a bull market, and the overall upward momentum has also prompted the banks' gold accumulation business to continue to heat up. At the beginning of 2025, many banks and branches have launched marketing for the gold accumulation business.

"In the new year! Become a more valuable person", the accumulated gold product marketed by Nanjing Bank supports regular deposits of gold and multiple cycle options. When mentioning the advantages of the accumulated gold business, Minsheng Bank pointed out that there are two subscription modes: instant purchase and fixed investment, with a minimum purchase of 1 gram; mobile banking and personal online banking can be used for signing, subscription, redemption, fixed investment and gold withdrawal, which is convenient and fast; T+0 trading, real-time funds are credited to the account, and trading is available from 9 am on Monday to 4 am on Saturday.

From January 3 to March 31, the Fujian Branch of the Industrial and Commercial Bank of China launched a welfare activity for individual customers in Fujian (except Xiamen) who successfully applied for "Jicunjin" and "Ruyijinjicun" and actively accumulated 1 gram (inclusive) or more. During the activity, customers can win a chance to draw a lottery by completing designated tasks (each task can only get one chance to draw a lottery), with a maximum cumulative draw of 50 yuan in instant discounts.

Accumulated gold is a gold investment business that uses RMB as the transaction settlement currency and can realize physical gold withdrawal. The accumulated gold shares held can be withdrawn in kind. A customer manager of a branch of a large state-owned bank in Beijing said, "Customers can purchase accumulated gold at any time through mobile banking. When the accumulated gold reaches 100 grams, they can make an appointment in advance to withdraw physical gold bars. Due to strong market demand, the supply of physical gold bars is temporarily in short supply. It is expected that there will be goods about three weeks after the Spring Festival." The current purchase price of accumulated gold in the bank is 657.40 yuan/gram.

"You can start with a small amount of money in the accumulation fund, and buy gold regularly or irregularly as planned. Small amounts add up to a large amount, which spreads the investment cost and effectively reduces the risk brought by short-term fluctuations in the gold price. It is loved by many young people. Moreover, the accumulation fund has strong liquidity. When you have capital needs, you can choose to redeem it at any time, and the funds will be credited quickly," said a customer manager of a joint-stock bank.

"The minimum investment amount for physical gold is usually high. It often takes thousands or even tens of thousands of yuan to buy a gold bar, and there are also additional costs such as storage fees," Wang Hongying pointed out. In contrast, accumulated gold has attracted more investors with a lower investment threshold. You only need a few hundred yuan to start investing, and there are no storage fees, and cash can be realized more quickly.

Be cautious when investing

In 2024, the international gold price has been unstoppable and has soared all the way. Spot gold and COMEX gold futures have been in a bull market since late February 2024, and they have set new historical highs many times in March, rising from the $2,100/ounce mark to the $2,200/ounce mark. Until early April, spot gold and COMEX gold futures broke through the $2,300/ounce mark. On April 12, they continued to set a new record and stood above the $2,400/ounce mark. Although it experienced a phased correction in the middle, at the end of October, both COMEX gold futures and spot gold prices hit record highs, breaking through $2,801/ounce and $2,790/ounce, respectively.

In terms of gold reserves, data from the People's Bank of China showed that as of the end of December 2024, my country's gold reserves were 73.29 million ounces, an increase of 330,000 ounces from the previous month. This is the second consecutive month that the People's Bank of China has increased its gold reserves.

The People's Bank of China's behavior of increasing its gold holdings again reflects its recognition of the value of gold, indicating that gold, as a safe-haven asset, will still have a high investment value in the future. In Wang Hongying's view, in 2025, the gold market is expected to show a slow bull market with a volatile upward trend. This trend is mainly affected by the following factors. First, the world has entered a cycle of interest rate cuts, and interest rate cuts are usually inversely proportional to the rise in gold prices. Therefore, it is expected that this will support the long-term rise in gold prices. In addition, global geopolitical tensions remain unabated. These unstable factors, coupled with the impact of the interest rate cut cycle, will keep gold strong and show a volatile upward trend in the medium and long term.

For investors, Wang Hongying suggested that they should adopt a prudent attitude when investing in gold. For example, when gold experiences a technical correction, they can consider buying in installments to spread the risk. It is important that investors should not blindly chase high prices or invest in gold through borrowing and leverage to avoid unnecessary financial risks.

Economist and new finance expert Yu Fenghui stressed that for investors, it is recommended to adopt a diversified investment strategy and not bet all funds on gold. Some gold can be appropriately allocated as a risk hedging tool, but other investment products should also be paid attention to, such as bonds or stocks. At the same time, pay close attention to policy trends and the response of the global market, and flexibly adjust the investment portfolio.

Beijing Business Daily reporter Song Yitong