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Hong KongHong Kong economy

Hong Kong shoppers take a break from gold as prices reach six-year peak amid US-China trade war

  • Gold tops HK$11,000 per ounce on Friday, among the highest levels since 2013 and up about 11 per cent since last year
  • ‘Sales have been affected at jewellery shops,’ says one local trader, with those still buying mostly mainland investors

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A customer inspects jewellery in Tsim Sha Tsui. The price of gold hit a six-year peak in recent weeks. Photo: Winson Wong
Zoe LowandDenise Tsang

Hong Kong shoppers are balking at buying gold ornaments, even for a wedding dowry, as the price of the precious metal has jumped to a six-year peak in recent weeks.

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The high prices mean more bad news for gold demand, which was already lacklustre thanks to the US-China trade war and the Year of the Pig being seen as unfavourable for getting married under the Chinese calender, according to traders.

The strength of gold prices looks set to gain steam on the back of looming interest rate cuts in the United States in the coming months and a weaker US dollar, they said.

“More clients have been trading-in gold bars they bought some years ago for a profit recently,” said a veteran trader at Lee Cheong Gold Dealers in Sheung Wan. “Many retailers will wait for prices to come down to shop for a dowry unless they are in a hurry.”

A 12.5 kilogram gold bullion bar sits in Lugano, Switzerland. Gold's haven qualities have come back in focus this year. Photo: Bloomberg
A 12.5 kilogram gold bullion bar sits in Lugano, Switzerland. Gold's haven qualities have come back in focus this year. Photo: Bloomberg
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Spot gold prices hit US$1,416 (HK$11,079) per ounce on Friday, among the highest since 2013. The price has gained 6.2 per cent in the past month and about 11 per cent since the beginning of this year.

For the past six years, the price of the precious metal primarily moved around US$1,000 to US$1,200.

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