Gold heats up, metal climbs to $1,058/ounce
Updated: 2009-10-09 07:44
By Lillian Liu(HK Edition)
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HONG KONG: The price of gold roared to a record for a third day yesterday, as the US dollar's slump prompted investors to buy the precious metal as a hedge against potential inflation. Despite the rocketing price, Hong Kong jewelers see strong sales growth, thanks to the Golden Week holiday and a traditionally auspicious year for weddings.
Bullion for immediate delivery climbed to $1,058 an ounce yesterday and is likely to reach $1,100 an ounce by the end of this year, according to dealers at Wing Fung Precious Metals Ltd.
Gold jewelry, whose prices fluctuate with that of bullion, still attract many buyers. "Our customers don't seem to pay too much attention to the price, especially those buying gold jewelry as wedding gifts for family members," said Emily Li, a brand general manager at Chow Sang Sang.
During the 8-day Golden Week holiday, which saw an influx of mainland shoppers in Hong Kong, Chow Sang Sang's sales grew over 20 percent around the first week this month, according to Li.
The growth is also spurred by the culturally entrenched belief that this year is an auspicious year for getting married, as dictated in Chinese Feng Shui. "This year is particularly good, as people don't want to miss the chance," Li said.
To ride the wave of growth, TSL Jewellery (Hong Kong) Co Ltd said it will introduce more newly designed gold jewelry and products to lure customers.
"The growing gold price doesn't affect our sales at all," said Ricky Ng, general manager of Hong Kong and Macao at TSL. "Sales jumped 20 to 30 percent," he added.
Mainland shoppers comprise over 50 percent of TSL's total customers in outlets located in tourism areas, while around a third of Chow Sang Sang's customers are mainland visitors.
Bullion has gained about 20 percent this year, propelled by the dollar's weakness and inflation worries after central banks and governments across the globe poured money into the financial system to help stimulate the economy.
"Investors are turning towards gold as a hedge in dollar weakness," said Adrian Koh, an analyst at Phillip Futures.
Peter Fung, head of dealing department at Wing Fung Precious Metals Ltd, said gold traded in China's market might drop a bit after the National Day holiday, as investors would cash some of their holdings taking advantage of high prices. "But for the long term, gold and its related investments are good, as always," he said.
(HK Edition 10/09/2009 page3)