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China gold market in the ascendant.
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In the past decade, with the prosperity of the world economy, the international gold market has entered a fast lane of development, and the demand and consumption of gold have hit record highs. The international gold price soared from 200 1 less than 300 USD/ounce to 20 1 highest point 192 1 USD/ounce. According to the 20 1 1 Annual Gold Demand Trend Report released by the World Gold Council, the global gold demand reached 4067 1 ton in 201year, and the value exceeded 200 billion US dollars for the first time, including the demand for gold ornaments1year. According to the latest report, even in the current severe global economic situation, the demand for gold in the first three quarters of 20 12 still reached 3 185 tons, with a value of nearly17 billion US dollars. Gold, an ancient metal, shines brightly in contemporary times and becomes the focus of people's attention.

Figure 1 2009 to 20 1 1 Global gold demand

Source: WGC GFMS Thomson Reuters.

Figure 2 Global jewellery gold demand from 2009 to 2011year

Source: WGC LBMA GFMS Thomson Reuters.

1. The Western Jin Dynasty moved eastward.

While the scale is expanding, the supply and demand structure of the gold market is also evolving. There is a common misunderstanding in society that the price of gold is mainly determined by western institutional investors. In the short term, from the perspective of the scale of a single transaction at the institutional level, this view may sometimes be correct. But in the medium and long term, it is only one of many equally important driving factors. Similarly, people tend to pay attention to investment demand, but often ignore that gold ornaments are always the main source of gold demand. In addition, whether it is gold jewelry purchase, central bank activities or investment demand, in the past, the fundamentals of the gold market reflected the events and activities in North America and Europe, but in the past 40 years, the focus has greatly deviated from these two centers. The rise of high-growth economies such as the BRIC countries (Brazil, Russian Federation, India and China) has weakened the influence of the West. This change is undoubtedly very prominent in the gold market. As important gold producers, the total gold output of China, Russian Federation and Brazil in 20 1 1 reached 650 tons, accounting for 1/5 of the global total. As the two largest gold consumers in the world, India and China demand more than 65,438+0,500 tons of gold every year. Judging from the market situation, China, India and Brazil all have exchanges for trading precious metal spot and futures, and all of them have attracted the attention of the world in a short time, while Russia is stepping up the introduction of precious metal spot and derivatives trading varieties. In addition, the official gold reserves of BRIC countries have also increased year by year. By 20 1 1, the official gold reserves of the four countries reached 2528.6 tons, including China 1054 tons, Russian 883 tons, Indian 558 tons and Brazilian 33.6 tons.

A study by the World Gold Council shows that in the past 40 years, the supply of gold has changed from relatively concentrated to geographically dispersed, especially in gold mine production (Figure 3). However, the output of gold mines in supply decreased, and the gap was filled by recovered gold. In addition, because the transaction of recycled gold in emerging markets is more convenient and cheaper, the supply ratio of recycled gold from emerging markets is on the rise.

Figure 3 Distribution of Gold Deposits (by Region)

Source: WGC GFMS Thomson Reuters.

On the other hand, the geographical center of gravity of gold demand has obviously shifted. Looking back at the demand situation at the beginning of each 10 year since the gold price was decoupled from the US dollar for 50 years, it is not difficult to find that the demand for gold has shifted dramatically from North America and Europe to the Indian subcontinent and East Asia (Figure 4). In 1970, the demand of North America and Europe accounted for 47% of the global demand. In 1980, it rose to 68%, and in 20 10, it fell to 27%. The share of Indian subcontinent and East Asia increased from 35% in 1970 to 58% in 20 10.

Figure 4 Distribution of Gold Demand (by Region)

Source: LBMA Bloomberg, WGC GFMS Thomson Reuters.

Investment has once again become an important part of demand (Figure 5). Investment demand in 20 10 years accounts for 38% of total demand (excluding central bank purchases). The share of investment demand in North America and Europe decreased from 74% in 1980 to 45% in 20 10, while the Indian subcontinent and East Asia accounted for a large part of the remaining investment demand, reaching 43% in 20 10. China is one of the fastest growing investment markets. However, in the aftermath of the financial crisis in 2008, the demand for gold in Europe rose again and became an important participant in the gold investment market again.

Figure 5 Distribution of Investment Demand (by Region)

Source: WGC GFMS Thomson Reuters.

The demand for gold ornaments is the main force of "moving west to east". The demand share of gold ornaments in North America and Europe has dropped from 44% of 1970 to 20 10/4%. Meanwhile, the demand for gold ornaments in the Indian subcontinent and the Far East increased from 36% in 1970 to 66% in 20 10 (Figure 6). Even in the current severe economic environment, in the third quarter of 20 12, Indian and China still accounted for 57% of the global demand for gold ornaments.

Figure 6 Distribution of Gold Jewelry Demand (by Region)

Source: WGC GFMS Thomson Reuters.

2. The soaring Oriental "Golden" Dragon

As the second largest economy in the world, China undoubtedly occupies a decisive position in the international gold market. The rapid development of the national economy has reduced the export demand in major markets, while the domestic consumption demand has continued to grow. Since the market-oriented reform was implemented in 2002, the gold market in China has maintained a rapid development momentum and experienced a soaring "golden decade". Since 2007, China has replaced South Africa as the world's largest gold producer for five consecutive years, with an annual output of 201/kloc-0 exceeding 300 tons. 20 1 1 In the second half of the year, China became the single market with the largest demand for gold balls and ornaments for the first time. In the third quarter of 20 12, the demand for gold in China reached 176.8 tons, second only to India, among which the demand for gold ornaments was 123.8 tons, accounting for about 27% of the global demand for gold ornaments (Figure 7).

Fig. 7 Global demand for gold jewelry in 2011year.

Source: WGC GFMS Thomson Reuters.

China's gold and jewelry market also developed rapidly in the "golden decade", which mainly experienced two stages: in the first five or six years, with the opening of the market and the improvement of living standards, the demand for jewelry by Chinese people continued to grow; In recent three or four years, the global financial crisis has raised people's awareness of risk aversion, and the value-preserving function of gold has been re-valued, which has become another consideration for consumers to buy gold ornaments. Therefore, although the price of gold has been rising in recent ten years, gold sales are still hot and gold buyers are in an endless stream. 20 1 1 the annual sales of gold ornaments in China is about 330 billion RMB, and the market scale should not be underestimated. In the future, there is still huge room for improvement in this field. According to the gold report of the Year of the Tiger released by the World Gold Council, in 2009, the per capita consumption of gold ornaments in China was only 0.26g (Figure 8), which was among the lowest in the world. If the per capita consumption level of gold in Chinese mainland catches up with that in India, Hongkong or Saudi Arabia, the annual demand for gold ornaments alone will increase by at least 65,438+000 tons.

Figure 8 World per capita consumption of gold jewelry in 2009

Source: GFMS, IMF, WGC.

China people have higher requirements for the quality of gold ornaments. At present, the demand for gold jewelry is mainly concentrated in 24K gold jewelry, and domestic brands have become the dominant market, among which Hong Kong brands are the mainstream, and they have a good performance in both high-end and low-end markets. Time-honored brands such as Chow Tai Fook occupy the mid-to-high-end market, and rising stars such as Jin Supreme quickly open up battlefields in the second and third tier markets. Brands such as Laofengxiang and Laomiao in mainland China also stand out because of their successful interpretation of traditional oriental culture.

There are three ways for gold jewelry brands to explore the market: first, brands directly enter large retail malls and open counters by joining; The second is to open counters in the form of direct stores, and the third is to open counters directly in specialty stores. Since the beginning of this year, many brands have fully liberalized their previously signed franchise stores, aiming to quickly open third-and fourth-tier cities and March into local consumer groups with growing demand capacity. With the continuous advancement of urbanization, these "small cities" are becoming the main driving force for the growth of demand for gold ornaments.

3. The ancient and young China gold and jewelry market.

In China, "love for hiding gold" is a long-standing tradition. Gold has represented auspiciousness since ancient times and is also a symbol of emperors. Wearing gold ornaments can not only show a person's identity, but also be a traditional way to celebrate a wedding or birthday. China people's cultural attachment to gold has laid a good foundation for the development of gold jewelry market.

The operation of gold ornaments in China started in the mid-1990s, and previously belonged to the category of franchising. In recent years, with the prosperity of the whole market, the gold and jewelry industry has developed rapidly. Although it has only been ten years, it has shown great vitality and potential, and also shows the unique characteristics and trends of Chinese style.

Wedding jewelry is the mainstream. In the traditional culture of China for thousands of years, gold has always played an important role in engagement or wedding. Gold ornaments symbolize auspiciousness and wealth, meaning "golden jade and good marriage", which is the "standard" for many new couples when they get married. According to the survey, more than half of the newlyweds said they would choose gold jewelry when buying wedding jewelry.

Fashion and personality have become new favorites. The design and technology of gold jewelry are constantly innovating, and the product style is no longer limited to the traditional dignified atmosphere, and the modern fashion atmosphere has become a common practice. Gold ornaments with both classical and modern temperament are favored by more and more consumers in China. For example, Only Gold launched by the World Gold Council in 2007 attracted the attention of young consumers with its fashionable design, unique creativity and exquisite craftsmanship. In recent years, with the rise of jewelry customization, gold ornaments tend to be avant-garde and personalized, winning the favor of a considerable number of young people who pursue self-labeling.

Diversification of sales channels. With the rapid development of the Internet market, e-commerce is becoming a new force for major jewelry companies to compete for the market. The combination of physical stores and online stores not only facilitates consumers to purchase products, but also saves operating costs for enterprises. More and more jewelry companies such as Chow Tai Fook, Zhou Shengsheng and Luk Fook Jewelry have started to set foot in online marketing, and have initially tasted the benefits brought by this model. A gold pendant owned by Chow Tai Fook has a monthly sales volume of nearly 1600 pieces. In the future, with the improvement and maturity of online sales channels, this model will surely bring rich returns to enterprises.

Demand for investment preservation has increased. With the deepening understanding of the value of gold, China people began to pay attention to investment in all aspects of life. In addition to buying gold bars, gold ornaments with profound connotations and implications and investment value are becoming a common means of wealth preservation for consumers. The unique 24K gold product in China market is the most valuable choice for gold jewelry investment. In addition, advanced technology, exquisite design and the uniqueness of personalized customization also add more collection value and significance to gold ornaments.

4. In the ascendant, stride forward

In recent years, the social and economic changes triggered by the reform have been accelerating. 20 1 1 year, China's per capita GNI exceeded $5,400 (Figure 9). According to this trend, the domestic middle class will continue to grow in the next few years. The disposable income and savings habits of this important group are interrelated with rapid urbanization, which may double the demand for gold in China in the next decade. While leading the steady growth of the national economy, the government has been committed to promoting the healthy development of the gold market. 20 10 in July, six ministries and commissions, including the People's Bank of China, issued "Several Opinions on Promoting the Development of the Gold Market", clearly proposing to enrich trading varieties, improve the gold market system and promote the formation of a multi-level market system.

Figure 9 Per capita gross national income and per capita gold demand in China

Source: GFMS Thomson Reuters, World Bank, WGC.

With the support of economic engine and policies, China gold market will continue to maintain a good growth trend for a long time and play an increasingly important role in the international arena. The gold jewelry industry will develop in the direction of branding and creativity, and the international competitiveness of national brands will continue to increase. More and more "Made in China" will land in the international gold market, showing the charm of the East. With the promotion of the brand, gold ornaments will pay more attention to individuality, connotation and design, which is expected to promote the traditional "pricing by gram" to "pricing by piece". Only Jin of the World Gold Council has become a pioneer in this field and achieved good results.

5. World Gold Council-Promote market development and shape the future of gold ornaments.

The World Gold Council is a market development organization in the gold industry, which is committed to playing a leading role in promoting and maintaining the demand for gold. At the same time, based on its own accurate market insight, develop solutions, services and markets supported by gold medals.

Since it set up its office in Beijing from 65438 to 0992, the World Gold Council has worked closely with the gold industry in China. In the past 20 years, the Association has assisted China's decision-makers in keeping abreast of the domestic market and put forward "Opening China's Gold Market in the New Period: Relevant Policy Research and Suggestions", which helped the central bank form the basic concept of opening China's gold market; We have introduced our own professional research results into China, regularly published reports on the trend of gold demand, and published a series of industry research reports, such as The Golden Yearbook and The Influence of Inflation and Deflation on the Trend of Gold, in cooperation with Thomson Reuters GFMS and Oxford Economic Research Institute, which provided a lot of information and resources for people in the industry to deeply understand the market. The association also actively responded to the government's policy of "saving money for the people" and cooperated with ICBC to launch innovative financial products such as "ICBC Gold Expert Provident Fund" and "Only Gold Gift Bar".

In the field of gold ornaments, the World Gold Council is committed to rebuilding the value of gold as the ultimate choice of jewelry, attracting a new generation of consumers who will shape gold ornaments in the future, creating new concepts and guiding new trends in the world. For a long time, the Association has been committed to spreading the advanced practice and promotion concept of the international market to China, not only deepening the traditional field of gold ornaments, but also further exploring the fashion frontier.

In 2003, the World Gold Council introduced the concept of "gold jewelry fashion", cooperated with jewelry companies such as Chow Tai Fook, Zhou Shengsheng, Caibai and Just Gold to create 18K gold jewelry with China characteristics, and introduced the gold expression series products representing the best Italian design level to China, bringing new ideas, new processes and new measures to the domestic jewelry industry, and promoting the fashion of China gold jewelry.

In 2004, the World Gold Council joined hands with Shanghai Huangcheng Jewelry and other enterprises to launch Chengfufu wedding gold ornaments, aiming at promoting oriental culture and integrating modern fashion wedding with traditional wedding ideas in China, so that young couples can not only enjoy the passion of modern western wedding, but also appreciate the profound meaning contained in China traditional culture. Since its introduction, Xifu has won people's wide love with its unique beautiful meaning and exquisite craftsmanship.

In 2007, in order to comprehensively improve the production technology of traditional gold products, the World Gold Council put forward the concept of "pure gold products" and launched the only gold promotion project, joining hands with jewelers such as Lao Fengxiang and Lao Miao Gold to enhance the image of traditional gold ornaments by modern marketing means. Only Kim Jae Jung took the lead in implementing "piece-by-piece pricing" sales mode, highlighting the craftsmanship of gold ornaments and encouraging processing enterprises to invest in design technology. Once the brand was launched, it quickly received enthusiastic response from the gold jewelry industry and consumers. In just five years, the brand flag of 24K gold jewelry has been established in the industry, and it has become a jewelry choice with both value-preserving characteristics and rich emotional connotation. Weijin guides people to gradually focus on the value of 24-karat gold and look forward to designing fashionable, unique and exquisite jewelry products, thus further promoting the gold jewelry industry to the high end. In 20 1 1 year, only Jinjin achieved sales of more than 36 tons, and showed a good growth trend.

20 12 China National Gold Group Gold Jewelry Co., Ltd. and the World Gold Council jointly launched the "Precious as Gold" boutique jewelry brand. The brand combines fashion design with classic craftsmanship, and combines the world-class design concept with the unique personality and characteristics of women in China, so that it conforms to the aesthetic concept of China people and better reflects the charm of modern women in China.

While promoting the brand of gold ornaments, the World Gold Council also pays attention to discovering and cultivating new forces in the industry. In recent years, the association and South African Rouen Ashandi Gold Co., Ltd. jointly held three gold decoration and design competitions of "Golden Imagination" (China), and "Golden Imagination" has been praised as the Oscar Award in the gold jewelry design field. With the aim of encouraging "China Design" and "China Creation", we are committed to promoting the development and progress of gold jewelry design and gold jewelry processing technology, and strive to transform bold and avant-garde display gold jewelry into commercial gold jewelry, enriching the China gold jewelry market.

In the future, in addition to the promotion of gold jewelry and gold investment products, the World Gold Council will continue to contribute to the development of China's gold market, build a bridge between domestic and international gold markets, and promote the sustainable development and prosperity of the domestic market.