BIZCHINA / Biz Life
Under influence of Midas touch
By Zhang Fengming (Shanghai Daily)
Updated: 2006-09-12 10:20
The country's consumers are willing to spend more on high-end gold
jewelry despite, or perhaps because of, high-flying gold prices, a China
Gold Association survey found.
In a poll conducted in eight cities including Shanghai, Beijing, and
Guangzhou, 11.8 percent of respondents said they will spend more than
5,000 yuan (US$629) on gold jewelry in the coming year while the figure
three years ago stood at a mere 2.1 percent.
"There is a trend for more high-end jewelry consumption in China as more
people are spending higher amounts on gold jewelry and the price of the
yellow metal is rising," said An Qiongwei, an association official.
More than 46 percent of respondents said they bought gold jewelry in the
past year, reported the survey, which was posted on the association's
Website yesterday.
Gold bullion prices in Asia, London and New York passed US$700 an ounce
in May, the highest level since 1980. Prices dropped in June but later
showed signs of a rebound.
The survey also indicated that 24-carat gold jewelry still dominates the
Chinese market as more than 60 percent of the interviewees said they will
opt for higher-purity products over 18-carat gold.
The 18-carat segment, whose prices are set by the piece, is less
sensitive to fluctuation. The market share of the 75-percent pure gold
jewelry rose to 15 percent in 2005 when the industry began heavily
promoting 18-karat gold, according to the World Gold Council.
Chinese have shown a traditional fondness for 24-carat gold jewelry, or
99.9 percent pure gold, as a safe haven against inflation.
The retail sales value of gold in China gained 40 percent due to higher
gold prices in the second quarter. Sales in terms of weight slipped 2
percent to 56.3 tons in the same period.
(For more biz stories, please visit Industry Updates)
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