The demand for gold jewelry in the world’s top consumer, China, is likely to plunge this year, as the China coronavirus negatively affects the shoppers’ sentiment, per Bloomberg.
“Jewelry retailers such as Luk Fook Holdings International Ltd. are shortening business hours and managing time off for employees in an effort to prevent the disease from spreading.
Zhang Yongtao, Chief Executive Officer of the China Gold Association, noted: “People are not in the mood to shop for jewelry. Stores and shopping malls are closed because of the virus. The sales of gold jewelry and bars will drop substantially this year.”
Metals Focus, a London-based research firm, sees a 6% drop in sales in China this year, extending an estimated 7% drop in 2019 to a seven-year low. It said the decline could turn out to be “particularly acute" given the Lunar New Year has traditionally been the busiest period.
Hong Kong retailers could see their profit from the city drop in 2020 amid the outbreak, according to Bloomberg Intelligence.
Chow Tai Fook Jewellery Group Ltd., the world’s second-biggest jewelry chain by market value after Tiffany & Co., plans to shut about 15 of its stores in Hong Kong after net income fell following the demonstrations that drove tourists away.”
So far in Wednesday’s trading, gold prices trade modestly flat, divided between a slowdown in China new coronavirus cases and persisting concerns over the economy. The yellow metal changes hands around $1567, at the time of writing.
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