International gold prices have surged to record highs, surpassing $4,500 per ounce today. Spot checks at multiple gold jewelry stores reveal that pure gold jewelry prices have exceeded 1,400 yuan per gram.
Against this backdrop, sales staff admit that consumer demand for gold jewelry has declined, with more customers opting for trade-in programs to upgrade their pieces. Meanwhile, investment gold bars are selling out, with many stores reporting limited stock or complete shortages.
According to store employees, investment gold prices already include value-added tax, and since no craftsmanship fees apply, their profit margins are significantly lower than jewelry gold. "Although investment bars sell well, they generate minimal profits, so store owners are reluctant to stock large quantities," one staffer explained.
Notably, while gold prices celebrate historic highs, financial reports from gold jewelry companies reveal concerning trends. Lao Feng Xiang's third-quarter results stand out particularly, showing both revenue and profits declining sharply with deteriorating earnings quality.
**Jewelry Demand Cools as Investment Gold Sells Out** As of press time, London spot gold traded at $4,488/oz, having risen $1,860 (70%) year-to-date. Following international trends, domestic retail gold prices have climbed steadily, with branded jewelry approaching 1,000 yuan/gram in the second half of 2025.
Market checks in Guangzhou show multiple brands adjusting prices upward: Lao Feng Xiang quoted 1,406 yuan/gram, Chow Sang Sang 1,411 yuan/gram, and Luk Fook 1,408 yuan/gram.
A Lao Feng Xiang sales associate noted that jewelry prices adjust daily based on international benchmarks, and high prices are dampening demand. "With prices above 1,000 yuan/gram, only wedding and gift purchases remain essential. More customers choose trade-ins to upgrade existing pieces rather than new purchases."
Meanwhile, investment bars sold out early this month. "One customer bought 200 grams at once. Most stores have no inventory left," said a staffer, who couldn't confirm restocking timelines. A Chow Sang Sang employee similarly reported dwindling bar inventory, noting increased sales of fixed-price jewelry items with intricate designs.
**Profit Pressures Mount for Heritage Brands** Despite gold's bull run, most traditional jewelers face operational challenges in 2025. Chow Tai Fook reported a 1.1% revenue decline to HK$38.99 billion for H1 FY2026 (ending September 2025), with net profit barely growing 0.1% to HK$2.53 billion. Chow Sang Sang's operating revenue fell 2% to HK$11.04 billion in H1 2025.
Lao Feng Xiang's performance decline appears most severe: Q1-Q3 2025 revenue dropped 8.71% to 48 billion yuan, with net profit plunging 19.05% to 1.44 billion yuan. The steeper profit decline signals weakening profitability.
Analysts attribute this to Lao Feng Xiang's heavy reliance on traditional weight-based gold jewelry, which suffers greater price volatility, while higher-margin products remain underdeveloped. Financial metrics show deterioration: gross margin fell to 8.17%, receivables grew 35% to 4 billion yuan, and operating cash flow plummeted 63.86% to 2.37 billion yuan.
The company's extensive franchise network (96.7% of 5,625 stores) compounds challenges. With slowing jewelry demand, franchisees' replenishment orders have decreased, pressuring Lao Feng Xiang's wholesale revenue. Jewelry sales dropped 17% year-over-year to 28.2 billion yuan in H1 2025.
While institutions remain bullish on gold prices, traditional brands like Lao Feng Xiang must urgently adapt to shifting consumption patterns and strengthen profit resilience amid sustained high gold prices.
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