Gold Prices Continue to Surge Above 1600 Dollars Per Ounce

Gold prices have been continuously going up even after they set a record high of 1,600 US Dollars per ounce earlier this month. The boiling-hot market is also changing gold purchases and investment demand in China.

Let's follow our reporter Liu Min to find out more.

Usually, this time of year is not a peak season when it comes to gold purchases. But this year, the gold stores in Tianjin have been flooded with customers. The price of gold products in those stores have stayed at around 390 yuan per gram for four months, but ever since the international gold price broke the previous record of 1600 dollars per ounce, store manager Chen Hongtai from Tianjin Baixin Jewelry Store says he's been closely observing the international market and may increase the price very soon.

"We've seen 20 to 30 percent more business coming in during the past two months. The retail price has remained at 390 yuan per gram, but we will adjust the price if the international price remains high above 1600 dollars per ounce."

Another store manager says that besides more gold buyers, more people have also come to the stores to sale their gold for cash.

"In the past, during this period, we generally only purchased 200 to 300 grams of gold from repeat customers, but now the amount has increased to 700 to 800 grams."

In order to accumulate more gold products, pawnshops in cities like Tianjin are also increasing their buy-in prices. Manager Yang Chuangang from the Tianjin Juhuilin Pawnshop says that they could possibly keep their number of customers from fluctuating simply by raising gold prices.

"We've got to adjust our strategy. In the past, we only offered prices of 270 or 280 yuan per gram, but now we have to pay more than 300 yuan to entice people to pawn their gold products here."

The manager says one odd thing has emerged since the beginning of the year, with more customers coming back to redeem their gold products. A customer surnamed Liu says he doesn't' regret paying more now to get back his gold necklace.

"You can see that the gold price is surging very fast so I don't care about paying more to get it back as long as this momentum keeps up."

At the same time, inland gold buyers have found Hong Kong to be a better place to purchase gold at lower prices. According to statistics from Hong Kong's Gold Association, the gold sales volume has increased by 40 percent compared to the same time last year. Some travelers from inland China say they've come to search for good deals.

"Coming to Hong Kong isn't easy, so I've come to speculate on some good products. I hear that the price here is lower thanks to tax policies."

"The price here is 10 percent cheaper than the one on the Chinese mainland."

So far, many domestic investors are still positive about the metal's function as a haven from risk. Unlike diamonds or jade, speculation on gold is not as crazy as high-risk, high-profit jewelry investments, but the metal's minimum six percent annual value increase can at least convince some investors to part with their money in order to hedge against inflation in a more stable manner.

For CRI, I'm Liu Min.