Buyers flock to gold as price drops
Investors stock up on jewellery and gold bars as price falls to lowest in five and a half years on expectations of a US rate rise, China stock woes
Gold trading firms and jewellery shops have been doing brisk business as prices drop, falling to their lowest in five and a half years last week.
"We have seen our customer numbers almost double. Sales have gone up 10 to 20 per cent in the past few weeks," said Henry Wu, a director at Lee Cheong Gold Dealers, a gold trading firm in Sheung Wan.
"It's actually not a major surprise as every time gold prices fall, mothers will buy to prepare for their daughters' weddings while some will stock up on gold bars as an investment."
It is traditional in China for a bride's relatives to give gold jewellery as gifts. Many mainland tourists prefer to shop for gold in Hong Kong where they are assured of quality and design.
Wu and his father are veteran gold traders whose family has been selling gold and jewellery for decades. He said his shop had been particularly busy since the price of gold dropped to US$1,003 an ounce on Saturday - the lowest since 2010.
"Whenever the gold price is down, sales of physical gold bars and gold jewellery shoot up. People just want to use the opportunity to buy low. I expect this to continue as there is no sign gold prices will recover any time soon," Wu said.
"We don't just get mainland tourists. Hong Kong investors and customers are also buying up gold jewellery and gold bars."