Chow Sang Sang gold distributor on Monday bought gold ornaments from customers at HKD30,230 (US$3,894) per tael troy and sold it for HKD37,280, a trading spread of 23%.
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A salesperson arranges 24K gold bracelets for Chinese weddings at Chow Tai Fook Jewellery store in Hong Kong, China December 14, 2017. Photo by Reuters |
It has raised buying price by 0.8% since Thursday, when gold hit a historic high of HKD30,930 per tael troy of 37.429 grams.
“The U.S. tariff policy has led to highly uncertain stock and currency markets, which has led investors and central banks to rush to buy gold,” said Brian Fung, CEO of the Hong Kong Gold Exchange.
This is why Hong Kong jewelry shops are looking to buy more gold from customers to meet surging demand, he said, as cited by South China Morning Post.
Most gold retailers in Hong Kong accept gold jewellery from the public, offering either cash or products in exchange.
“When the gold price keeps hitting a record high, [retail] buyers may be reluctant to pay at a high price,” Fung said. “But those who have gold jewellery at home may want to sell it to the shops to cash in.”
The escalating trade war and anticipated interest-rate cuts are likely to drive gold prices higher, according to Carsten Menke, head of next-generation research at Swiss wealth manager Julius Baer.
Menke noted that gold has risen approximately 17% since early March, with U.S. President Donald Trump’s tariff policies accelerating the climb.
“The dominant driver is the unprecedented uncertainty Trump’s tariffs have caused, related fears of a recession, and rising risk aversion in financial markets,” Menke said.
He added that a weaker U.S. dollar and growing expectations of lower U.S. interest rates have further bolstered gold’s appeal.
Several international organizations have raised their gold forecast for this year.
Goldman Sachs last week hiked its end-2025 gold price forecast to $3,700 per ounce from $3,300, with a projected range of $3,650-$3,950, citing stronger-than-expected demand from central banks and higher exchange-traded fund inflows due to recession risks, Reuters reported.
Citi Research raised its gold price target for the next three months to $3,500 per ounce from $3,200, led by fresh buying from Chinese insurers and safe-haven flows amid tariff risks and market weakness.
