Coronavirus Outbreak Takes Toll on Chinese Gold Jewellery Sales

SEATTLE (Scrap Monster): The crisis on account of outbreak of the deadly coronavirus is likely to hit gold jewelry sales in China.

According to reports, the virus attack has led to closing down of shopping malls and retail stores in several provinces of the country. The shops are seen shortening business hours, so as to comply with government efforts to prevent spreading of the virus. The people in the country are not in a mood for shopping, industry participants.

Metals Focus foresees 6% dip in Chinese gold jewelry sales this year. It must be noted that the sales had plunged to seven-year low in 2019, falling sharply by 7% from the prior year. The physical demand for gold is expected to see drastic decline, on account of slower economic growth in the country and rising gold prices.

The pro-democracy protests in Hong Kong are feared to badly impact store sales. As per reports, Chow Tai Fook Jewellery Group Ltd. plans to shut nearly 15 stores in Hong Kong, citing deep cut in net income.

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The Hong Kong Jewelry Manufacturers’ Association predicts 70% drop in gold jewelry sales volume in Q1 this year, compared with the year before period. Also, the capacity utilization at jewellery making factories in the region has declined to nearly 20%-30%, as employees are found unwilling to report for duty on virus fears.