The global price of gold has tanked, and Guangzhou’s gold market is booming.
The front page of the Guangzhou Daily (广州日报) today has images of long queues that formed the last few weeks in the city of people seeking to part with loads of cash for cheap gold.
From a peak of US$1,900 in August 2011, the price of gold has been on a gradual decline, and Monday this week saw a precipitous drop of 9% in a single day. Starting from Saturday and persisting through yesterday, a veritable gold rush has engulfed Guangzhou as the price of gold jewelry fell to 358 yuan per gram. Many stores in the city even sold clean out of gold. The head branch of the Dongshan General Merchandise store in the city yesterday sold 12 million yuan’s worth of pure gold, while its branch in Huadiwan set a new single day record for pure gold sales of 15 million yuan. The largest single purchase was when one customer bought 2,000 grams of gold for 1,75 million yuan.
Journalists from Guangzhou Daily noticed that people were waiting in long queues to purchase the stuff, and after parting with their cash, some happily brandished their spoils. One such was 70-year-old grandma Kong, who flashed the five bracelets, three rings, one set of large solid gold bars and a pendant she had just purchased for 70,000 yuan. Even gold jewelry items that usually sell much slower flew off the shelves in the last few days, and many stores ran out of stock. Yet customers were happy to pay in advance, even though (as some of the gold merchandisers told the Guangzhou Daily), most of the sellers in Guangzhou dropped their prices by only 12%, less than the 16% drop in the global price of gold last week.