The attraction of falling gold prices to ordinary people will increase. Chinese in Asia, especially in China, generally prefer gold and gold ornaments, because gold is a symbol of wealth. Especially in coastal areas, people usually like to wear gold ornaments and buy them when they get married.
If the price of gold falls, it means that people's preference for gold reserves will increase. Because ordinary people are not interested in and unable to reserve more gold bricks or bars, they will turn to buying gold ornaments. ?
Especially as a very well-known gold jewelry dealer in China, everyone must like to choose big well-known brands to buy gold jewelry, which must be very beneficial to Chow Tai Fook.
Ordinary people will think that gold jewelry is more worth buying when it falls, which invisibly increases everyone's purchasing power of gold jewelry, increases Chow Tai Fook's sales and increases Chow Tai Fook's profits.
After the gold price falls, Chow Tai Fook's profit will increase.
As a well-known gold designer and seller, Chow Tai Fook's gold jewelry has a certain premium space relative to the gold price, and the premium space is mainly the design cost and brand premium. If the overall price of gold falls, it also means that for a gold shop like Chow Tai Fook, due to the design characteristics, it can sell jewelry at a reduced price, or slightly increase the price of special jewelry, which will reduce its cost, increase its sales profit, and correspondingly increase its sales volume and profit.
When the price of gold falls, Chow Tai Fook can seize the opportunity to hoard gold.
When gold falls, as a well-known gold brand like Chow Tai Fook, it will hoard a large amount of gold at a low price. It can use the same funds to buy more gold than in the same period, and it can also use the company's cash flow to reserve more gold, which can be used as a strategic reserve for value preservation. After a large amount of gold reserves, it can ensure the future production of gold ornaments, and the stock of production raw materials is sufficient. When the price of gold rises in the future, their own production costs will not increase, so that when the overall price of gold rises, the sales price of gold ornaments can be increased. Although the price of gold ornaments decreased when the price of gold fell, the overall profit will not be reduced because of the added value of the brand. However, when gold rises in the future, the sales price can be increased because of a large amount of gold hoarding, which will increase the overall profit of Chow Tai Fook, and it is possible to maintain high inventory and high profit sales in the next few years.
Therefore, when the price of gold falls for some reason, it is a very happy opinion for Asian customers. I remember that a few years ago, when gold just fell, Chinese aunts started the buying mode of buy buy. Although gold fell for a while, it is enough to see that China people's preference for gold ornaments is undoubtedly beneficial to gold jewelers like Chow Tai Fook.