In the midst of uncertain global economic prospects, the volatility of gold prices has intensified. In response to short-term price risks, businesses in the Shuibei Gold and Jewelry Market in Shenzhen have increased margin requirements, but this has not dampened consumers’ enthusiasm for purchasing gold bars as a hedge.
Recently, the price of gold has experienced sharp fluctuations. The spot price of gold in China fell by 50 yuan/gram in a single day. In the Shuibei Gold and Jewelry Market in Shenzhen, the price of gold has been fluctuating sharply in the past few days, leading businesses to raise the margin for consumers purchasing investment gold bars. However, consumer demand remains strong, with gold bars in short supply.
Over the past few days, the price of gold has undergone drastic fluctuations. On April 23, the spot price of gold in China fell by 50 yuan per gram in a single day.
On April 24, gold prices rebounded slightly. What impact will the volatility of gold prices have on the market?
Reported by the “Shenzhen Evening News” on April 25, the sharp fluctuations in gold prices in recent days have prompted businesses in the Shuibei Gold and Jewelry Market in Shenzhen to raise the margin for consumers purchasing investment gold bars to mitigate risks.
Yip Zhuo-geng, a business owner in Shuibei Gold and Jewelry Plaza in Shenzhen, Guangdong, explained that there may be some buyers opting out of their contracts. For example, a person who previously paid a deposit of 8,300 RMB per gram for a kilogram of gold bars might now find the price dropped below 8,000 RMB per gram on April 23, resulting in a loss of 30,000 RMB. If a buyer decides to opt out, they may return the gold bars, and the remaining loss might have to be covered by the business. Therefore, currently in Shuibei, it is recommended to purchase a kilogram of gold with a margin of 50,000 RMB.
The reason for requiring a margin when purchasing gold bars is not only due to the drastic fluctuations in gold prices but also the limited supply of gold bars. Inside a wholesale shop specializing in investment gold bars in Shuibei, Shenzhen, many of the counters are already sold out.
Mr. Zhu, a gold importer, mentioned that there are long queues in the exhibition hall, and he had to wait for two hours to get his hands on a small quantity of gold.
Mr. Xiao, another gold importer, indicated it’s not easy to snatch up gold as they have to place orders in advance, and it’s not guaranteed that the gold will be available. Orders made two days in advance are only fulfilled on the current day. While they primarily deal with jewelry, customers are now more inclined towards purchasing gold bars for their perceived value retention, leading to an increased demand for gold bars.