Hongkongers rush to sell, buy gold as precious metals price hits record high

Many Hong Kong residents are heading to jewellery shops to sell – or buy – gold after the precious metal hit a record-high price this week.

Gold has surged more than 10 per cent on the global market this year, reaching a record US$2,942.70 per ounce (28.3 grams) on Tuesday. That is on top of a 26 per cent increase last year – the biggest annual gain in 14 years.

The price in Hong Kong has risen in tandem, hitting HK$27,040 per tael (US$3,466 for 37.9 grams) on Tuesday, which is 35 per cent higher than at the beginning of last year.

The rise is benefiting jewellery shops. Fook Tai Jewellery Group, which has seven retail shops in Hong Kong, is among those seeing a rush of customers. Most want to sell, but some are looking to buy. Most gold shops in the city accept clients’ gold jewellery in exchange for cash or other products.

“Many customers have come to cash in their gold jewellery since May last year,” said Anita Lee, product manager at the company. “At the same time, there are also many customers, particularly mainland visitors, who are going to get married and are rushing to buy gold jewellery now, as they are worried the price will go up further.”

Many people were also buying gold bars and coins in expectation of further price increases, she said.

“Whenever gold prices rise, customers tend to cash in their existing gold jewellery,” said Robert Lee Wai-wang, vice-president of Hong Kong Gold Exchange, the local gold bourse. “They could make decent earnings if they bought their gold jewellery some years ago.”