International gold prices have surged, pushing wholesale gold prices at Shenzhen's Shuibei market up nearly 50 yuan in just two days. A field visit reveals a mix of optimism and caution among buyers. On August 6, spot gold topped $4,300 per ounce intraday, hitting a seven-week high, while December gold futures settled at $4,330.70 per ounce, up 0.59%. This rally directly impacts domestic markets, with Shuibei's 999 fine gold wholesale quote reaching 1,100 yuan per gram, a jump of nearly 50 yuan in two days.
Compared to January's rally, when spot gold hit a historic high of $5,598 per ounce and domestic brand jewelry gold surpassed 1,600 yuan per gram, sparking a buying frenzy, today's price rise is reigniting interest. A field visit to Shenzhen's Shuibei gold market shows a polarized consumer sentiment: some are waiting and watching, worried about further price hikes, while others are buying gold bars in batches for value preservation. For those purchasing wedding jewelry from across provinces, the rising prices have not deterred their scheduled purchases.
Jewelry store operators report that August to October is the peak wedding season, with a noticeable increase in customers buying three-piece or five-piece gold sets, often favoring heavy pieces. While foot traffic has risen, sales volumes are below expectations. A stark contrast is evident in gold recycling versus trade-ins: recycling business has seen only three to four orders in the past half month, while trade-in services have handled 30 to 40 orders, making it the core business for stores.
What is driving this gold price surge? Analysts attribute the rebound to geopolitical and monetary policy factors. Signals of easing tensions between the US and Iran, along with the imminent implementation of the Strait of Hormuz navigation agreement and renewed talks on a memorandum of understanding, have reduced market risk aversion. International oil prices have fallen, easing inflation pressures, and expectations for a Federal Reserve rate hike have weakened, with September rate hike odds dropping from 67% to 55%. The US dollar index and Treasury yields have also declined, boosting the appeal of dollar-denominated gold. US private sector employment in July rose by only 44,000 jobs, far below expectations, and markets are closely watching the July nonfarm payrolls data due on August 7. If the data is weak, it could further strengthen expectations of a Fed rate hike pause, supporting gold prices.
China's gold consumption structure is undergoing significant changes. On August 6, the China Gold Association released first-half industry data: domestic gold output was 152.908 tons, down 14.62% year-on-year, while gold consumption reached 511.412 tons, up 1.23%. Driven by sharp gold price fluctuations and new gold tax regulations, domestic consumption patterns continue to diverge, with gold bars and coins becoming hot market items. Higher gold prices have increased costs for industrial gold users, reducing industrial gold demand. Due to factors like weaker gold prices, domestic gold ETF holdings increased by 28.677 tons in the first half, down 66.17% from the same period last year.
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