The cumulative increase in gold prices is nearly 30%. What should investors do?

　　Gold price fluctuations have become a hot topic this year. Overall, gold prices have risen significantly by nearly 30%. Although gold prices continue to rise and even hit a record high, the performance of companies in the gold industry chain is differentiated. While the performance of companies upstream of the gold industry chain has increased, the performance of many gold shops has declined and they have reduced their store numbers.

　　Analysts pointed out that although gold is regarded as a safe-haven asset, the risk of volatility still exists and investors need to make decisions carefully.

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High Gold buying enthusiasm, sluggish gold jewelry sales, gold shops closing stores

　　Since the beginning of this year, the gold price has hit a record high 39 times. As the gold price continues to rise, some consumers have begun to wait and see. Dai Chongye said that the current gold price has risen a lot compared to the previous year, and the consumption of jewelry gold is weak.

　　According to data from the China Gold Association, in the first three quarters of 2024, the national gold consumption was 741.732 tons, a decrease of 11.18% compared with the same period in 2023. Among them, gold jewelry was 400.038 tons, a year-on-year decrease of 27.53%; gold bars and gold coins were 282.721 tons, a year-on-year increase of 27.14%.

　　Unlike the weak consumption of jewelry gold, gold investment products continue to improve. As the overall gold price continues to rise, the public's enthusiasm for investment in gold products such as gold beans and gold bars remains unabated.

　　Chow Tai Fook's third-quarter financial report for 2024 showed that in the six months ending September 30, 2024, Chow Tai Fook Group's turnover fell by 20.4% year-on-year. Chow Tai Fook said that this was mainly due to the sharp fluctuations in international gold prices during the period, which resulted in losses from the revaluation of gold loan contracts. Chow Tai Fook's same-store sales in mainland China fell by 25.4%, and a net of 145 Chow Tai Fook jewelry retail outlets were closed in mainland China. During the same period, Chow Tai Fook's gold jewelry and product sales fell by 21.6%.

　　In its interim results (six months ending September 30, 2024), Luk Fook Group said that its revenue decreased by 27.2% compared with the same period last year, mainly due to the decline in gold product sales caused by the record high gold prices during the period. Luk Fook Group has a total of 3,408 stores worldwide, of which 175 stores have been reduced.

　　At the same time, the performance of upstream enterprises in the gold industry chain has frequently “reported good news”. Zijin Mining's third quarter report shows that the company achieved operating income of 230.396 billion yuan in the first three quarters, a year-on-year increase of 2.39%; net profit attributable to the parent company was 24.357 billion yuan, a year-on-year increase of 50.68%.

　　Shandong Gold's third quarter report shows that the company achieved operating income of 67.006 billion yuan in the first three quarters, a year-on-year increase of 62.15%; net profit attributable to the parent company was 2.066 billion yuan, a year-on-year increase of 53.57%.

How investors invest in gold

　　Industry insiders said that multiple factors, such as the global economic situation, monetary policy, and geopolitics affected gold prices.

　　Recently, Liang Pusen, manager of Qianhai Kaiyuan Fund, conducted an in-depth analysis of the trend of gold prices and the reasons behind it. The main reason for the overall rise in gold prices in recent times is the global economy's slow recovery and the rise in risk aversion in the financial market. Although the financial attributes of gold have played a certain role in the recent rise in gold prices, it is not the main driving force.

　　Looking ahead, Liang Pusen believes that although the commodity attributes have little impact on the gold price, the continuous increase in gold demand will support the basic plate of gold prices. In terms of financial attributes, gold, as one of the safe-haven assets that can effectively fight inflation, still accounts for a relatively low proportion of global financial assets, so it has a high allocation value.

　　Liang Pusen recommends that investors adopt a long-term fixed investment approach to allocate gold assets. As a hedging tool that can resist risks such as inflation and currency depreciation, gold can provide investors with certain protection and stability during unstable periods. However, since short-term price changes are unpredictable, investors are advised not to blindly chase high prices. By allocating gold assets across time through long-term fixed investment, the impact of market fluctuations and investment risks can be reduced. At the same time, regular investment can also help investors gradually increase the allocation ratio of gold assets.