RapNet


Rapaport News

 

Polished Markets

 

Advanced search
Latest Articles
Videos
Features
News
Mining
Rough Markets
Polished Markets
Manufacturing
Retail

China

Apr 30, 2013 12:04 AM   By Julius Zheng
Print Print Facebook Facebook Twitter Twitter Share Share
Gold Drops, Buying Increases

Overall economic development in China was stable in the first quarter of 2013, with gross domestic product (GDP) increasing 7.7 percent year on year, according to the April 15 report of China’s National Bureau of Statistics. The same report shows that the total retail sales of gold, silver and jewelry in China reached $3.7 billion in March, increasing by 26.3 percent year on year. The first quarter’s retail sales reached $12.3 billion, gaining 17.7 percent. Gold jewelry, figurines and gold bars also were selling well in April because of the recent drop in the price of gold. Diamond retail continues to be stable as the weather gets warmer and more people are getting married.

Mixed Reaction to Gold’s Fall
   The dramatic April decline in the price of gold triggered mixed reactions. Those who bought “paper gold” and gold bar products in recent weeks and months recognized they were now posting a loss on their investment, but many other investors continued their attempt at “Chao Di,” the Chinese phrase for buying at the bottom price. Consumers were happy to buy gold jewelry when they saw how the prices had dropped, especially since April and May are the high season for weddings. Many jewelry retailers reported their sales were comparable to the Chinese New Year holiday season.
   There are plenty of cautions and warnings addressed to investors regarding the risk of speculation and discussions remained heated on how much more the price could drop. Still, the surge in purchasing did not slow. There were reports of one investor buying 10 kilograms of gold bars in a single purchase. Shortages of gold products, including certain lines of popular gold jewelry and gold bars, also were reported in jewelry stores in various cities. Even on April 16, the day after the New York futures gold price for June delivery dropped 9.27 percent to $1,361 per ounce — the sharpest single-day drop in three decades — the Shanghai TV station reported that one investor bought over $1.5 million worth of gold bars in a lump sum in the city.
   On the other hand, diamond sales were not affected by the roller-coaster ride of gold prices because most consumers do not associate the price of diamonds with that of gold.

Planned Auctions
   Fyodor Andreev, ALROSA president, and Lin Qiang, president of the Shanghai Diamond Exchange (SDE), have signed a letter of intent in Beijing to collaborate on auctioning rough and polished ALROSA diamonds through SDE. “China is one of the most dynamically developing countries in the world. We believe the Chinese market has a great potential for the growth of diamond jewelry consumption and of rough diamond consumption as well,” Andreev said. “ALROSA has experience in cooperating with companies from China, including in long-term agreements, and we hope this cooperation will go further.”

Estate Jewelry
   Chinese people are not particularly interested in second-hand items unless they are considered antiques, artifacts or carry special meaning. But, among estate jewelry, nephrite and jadeite, collectively called jade, can be a different story. The Chinese believe wearing jade next to the skin will bring luck, and can also improve the stone’s luster and transparency. “Old” jade is more acceptable than other “old” gems and sometimes even more expensive than new jade. Diamonds are a recent addition to the China jewelry industry, compared to several thousand years of experience with jade. Sometimes a smart consumer can find a good deal in consignment shops or pawnshops, but most newlyweds aren’t particularly interested in estate jewelry.
   The development of the estate jewelry market and market acceptance of estate jewelry varies from region to region. In addition, estate jewelry might move though various channels. Some will be sold “as is” or after basic cleaning in consignment shops or pawnshops. There, they are often displayed alongside such valuable items as estate watches and collectible cameras. Other estate jewelry will be purchased by diamond dealers or cutters, who might remove the diamonds for certification, resale or recutting. Estate jewelry with higher value or special significance will often be sold through auction houses.
Print Print Facebook Facebook Twitter Twitter Share Share
Tags: Julius Zheng
Similar Articles
MR Marketing 150Martin Rapaport Urges $1B Marketing Spend
Sep 11, 2019
Martin Rapaport hascalled for more effective marketing of diamond jewelry...
24 Karat Club Names Excellence Honorees
Belgium Diamond Trade Slows



Call Us: 1-702-893-9400
Member License Agreement   RapNet Trading Rules & Code of Conduct    Privacy Policy  
  
twitter twitter
About Rapaport
Advertise with us