Gold Prices Wipe Out Year-to-Date Gains: A Bracelet Purchase Loses 8,000 Yuan, Chow Tai Fook's "One-Price" Increases Slow Down

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In early March, consumer Wang Lan was interested in a small horse necklace at Chow Tai Fook: the plain gold version is priced per gram at about 27,000 yuan; the diamond-inlaid version is slightly heavier, with a flat price of around 34,000 yuan.

She initially preferred to buy the inlaid version, thinking, “The premium isn’t high, a few thousand more is just paying for craftsmanship.” Wang Lan planned to wait and see, not placing an order immediately.

Within just a few weeks, gold prices reversed course. Last weekend, Chow Tai Fook’s pure gold jewelry prices dropped from 1,652 yuan/gram at the beginning of the month to 1,397 yuan/gram, with the plain gold small horse necklace price falling back to about 23,000 yuan. “The gap suddenly widened,” Wang Lan said. The sales clerk told her that new tags had arrived, and the new price for the diamond-inlaid version was about 6,000 yuan higher. Wang Lan hesitated, saying, “If gold prices keep falling, I’ll buy the plain gold one.”

Before the Spring Festival, market rumors suggested that Chow Tai Fook would raise the prices of flat-price products in mid-March by 10%–30%. Among them, the “Five Emperor Coins Pure Gold Bracelet” was once rumored to increase to 71,800 yuan. Around March 15, Beijing News Shell Finance reporters learned from stores that new tags had arrived, and the product was priced at 59,800 yuan, a real increase of about 11%, lower than previous expectations. Nevertheless, the current price is nearly 50% higher than the approximately 38,600 yuan at the start of 2025.

However, the originally “on the verge” price adjustments have yet to be implemented. Since March, international gold prices have continued to decline, leading to a synchronized drop in domestic gold jewelry prices. Consumer Mr. Li said he bought a gold bracelet at a jewelry store during the Spring Festival, which has already lost him 8,000 yuan.

On March 23, Chow Tai Fook’s official website showed that the day’s pure gold jewelry prices were 1,375 yuan/gram, down from the peak of 1,706 yuan/gram at the end of January, a decrease of 331 yuan/gram.

The volatile downward trend in gold prices has also created uncertainty about the expected price increases of flat-price products. Many consumers asked on social media, “Will the ‘flat-price’ gold jewelry still go up?”

Multiple brands follow the trend, Chow Tai Fook’s “flat-price” price hike delayed

Since last week, international gold prices have continued to decline, with the downward trend extending on March 23, nearly erasing the year’s gains. On that day, several gold brands simultaneously lowered their retail prices: Chow Tai Fook at 1,375 yuan/gram, Zhou Shengsheng at 1,370 yuan/gram, Luk Fook at 1,373 yuan/gram, China Gold at 969 yuan/gram, with daily drops close to 5%. Compared to the high point at the end of January, mainstream brands’ prices have fallen by about 277–331 yuan/gram, roughly 20%.

Recently, Shell Finance reporters visited Chow Tai Fook stores in Beijing multiple times and found that new tags had arrived, but the specific timing of price adjustments remains unclear. Sales staff said, “We need to wait for the company’s unified notice.”

On March 23, Chow Tai Fook’s official customer service responded to reporters that product prices are affected by raw materials, operating costs, market environment, and other factors. Based on fluctuations in international gold prices, the company has decided to delay the timing of this price adjustment.

Entering 2026, as gold prices fluctuate at high levels, many brands have taken the lead in raising flat-price products. Chow Shengsheng and Chao Hongji have successively increased their flat-price product prices, generally by 10%–20%, with some items rising by over ten thousand yuan. Gufa Gold, Balin, and Linchao respectively completed price hikes at the end of January and early February; Laopuo Gold launched its first round of price increases for 2026 on February 28, with increases between 20%–30%.

In 2025, Chow Tai Fook also adjusted the prices of its gold products three times. The company previously responded that pricing of gold products mainly depends on raw material costs, production losses, and operating expenses, with a monitoring mechanism to adjust retail prices in a timely manner based on gold price changes.

Industry insiders believe that the price increases in gold jewelry are driven not only by costs but also closely related to brand strategies. In recent years, as industry competition intensifies, brands like Chow Shengsheng and Chao Hongji have continued to expand their flat-price offerings, while emerging brands like Junpei and Balin also generally adopt fixed pricing models. Chow Tai Fook is accelerating its transformation, including closing inefficient franchise stores and increasing the proportion of priced jewelry, aiming to shift from “selling by gram” to “selling by piece,” further aligning with luxury logic.

“Industry pricing strategies are being reshaped, and ‘flat-price’ has become an important profit source for some brands,” said Zhou Ting, president of Key Opinion Research Institute. However, she warned that if brands haven’t built a “moat” independent of gold prices, over-reliance on flat-price models risks setbacks: if gold prices fall, sales and profits could suffer.

She pointed out that the gold jewelry industry is moving toward mainstream “flat-price” models, aiming to break free from gold price fluctuations and establish premium capabilities. But currently, most brands’ flat-price products still depend on gold price movements, with high profitability mainly supported by rising gold prices and hedging demand. When gold prices decline, the premium mode faces pressure, leading to increased industry segmentation: leading brands can stabilize profits through flat-price strategies, while smaller brands may be eliminated.

Supporting high margins, priced jewelry sales account for over 30%

In recent years, flat-price products have become a key profit pillar for Chow Tai Fook.

Financial reports show that in the first half of the 2026 fiscal year (April to September 2025), sales of fixed-price products including the Palace Museum series, Chuanfu, and Chuanxi reached HKD 3.4 billion. The retail contribution of priced jewelry in mainland China increased from 27.4% in the same period last year to 31.8%. Chow Tai Fook stated that with the rising proportion of priced jewelry and gold price increases, the group’s gross profit margin remained above 30%.

In the first half of the 2026 fiscal year, Chow Tai Fook achieved revenue of HKD 38.99 billion, a slight decrease of about 1.1% year-on-year; net profit attributable to shareholders was HKD 2.53 billion, up 0.16%. In terms of sales performance, same-store sales at mainland direct-operated retail outlets increased by 2.6%, franchise outlets by 4.8%; same-store sales in Hong Kong and Macau increased by 4.4%.

Chow Tai Fook repeatedly emphasized that in the first half of 2026, the sales of high-margin priced jewelry remained strong. The financial report shows that during this period, the group’s revenue from priced gold jewelry reached HKD 11.4 billion, up 9.3% year-on-year; the average selling price of priced gold jewelry in mainland China rose to HKD 6,300, an 18.9% increase.

In recent years, Chow Tai Fook’s performance has been under pressure. In 2025, the company achieved revenue of HKD 89.656 billion, down 17.5% year-on-year. Although operating profit increased by 9.8% to HKD 14.746 billion, net profit attributable to shareholders declined 9.0% to HKD 5.916 billion. The overall retail environment for gold jewelry has been under pressure, with mainland China, which accounts for over 80% of the group’s revenue, declining 16.9% year-on-year, with same-store sales down 19.4%; sales in Hong Kong and Macau also fell 26.1%.

A large number of franchise stores have somewhat dragged down Chow Tai Fook’s performance. Data shows that the number of stores increased from over 4,400 in 2021 to more than 7,400 in 2024. As the proportion of franchise stores increased, the company’s overall profitability was affected, with gross profit margin dropping from 28.6% in 2021 to 20.5% in 2024.

In the past two years, Chow Tai Fook has painfully “cut its losses,” optimizing its store network. By the end of September 2025, the company had closed over 600 stores in half a year, reducing about 1,500 stores since March 2024.

Store restructuring and cost control measures have begun to show results. In the first half of 2026, Chow Tai Fook’s gross profit margin remained above 30%, reaching a high level in recent years. The company said that through store optimization and strict cost management, the group’s operating profit margin increased by 30 basis points year-on-year to 17.5%, a five-year high.

Industry segmentation intensifies, Chow Tai Fook bets on high-end positioning

Against the backdrop of fierce competition in the gold jewelry industry, relying solely on accelerating the flat-price product strategy is not enough for Chow Tai Fook.

Over the past two years, international gold prices have continued to rise, and industry segmentation has become more pronounced. Some companies have profited handsomely during gold price increases, while others are under pressure amid high costs and demand fluctuations.

Meanwhile, high-end domestic gold brands are quietly emerging, such as Laopuo Gold, Linchao Jewelry, Junpei, and Balin, which are gradually becoming phenomenon-level Chinese潮 brands. For example, Laopuo Gold’s latest earnings forecast shows that in 2025, sales are expected to exceed 30 billion yuan, with net profits close to 5 billion yuan—more than doubling both revenue and profit—making it one of the fastest-growing brands in the industry.

Faced with the impact of these emerging high-end brands, traditional industry leader Chow Tai Fook has begun re-evaluating its positioning and accelerating strategic transformation.

Over the past year, Chow Tai Fook has closed underperforming stores, expanded experience stores, enhanced design premiums and craftsmanship in gold products, and increased the proportion of higher-margin priced products. On the branding front, it is gradually adopting luxury logic to strengthen brand image and premium capabilities.

In March this year, Chow Tai Fook Jewelry Group announced the appointment of David Tse as Global Creative Director. Tse, formerly Creative Director at Hermès Shanghai, is the first permanent creative head outside Paris headquarters for the brand. Chow Tai Fook said this appointment is a key move to promote brand upgrading and internationalization. It shows that Chow Tai Fook aims to leverage its experience in luxury to enhance design capabilities and accelerate high-end transformation.

In fact, Chow Tai Fook’s high-end efforts have already begun. In June 2025, the company launched its first high-end jewelry series, “He Mei Dong Fang,” seen as an important step toward luxury jewelry. The same year, Chow Tai Fook invested millions of yuan to build a flagship store in Hong Kong and opened new-designed stores in key cities across mainland China, aiming for a more luxury brand image. The company states that these new stores generally perform better than traditional ones.

From industry trends, high-end positioning has become a major direction for gold jewelry companies. With consumer upgrades and increased cultural confidence, gold products with distinctive design and craftsmanship are increasingly favored by young consumers. Industry forecasts suggest that by 2030, China’s high-end gold jewelry market could surpass 300 billion yuan, with profit margins and demand significantly higher than traditional weight-based sales.

Zhou Ting believes that Chow Tai Fook’s recent high-end strategy is correct and that it is one of the most promising Chinese-style luxury brands. However, she also emphasizes that to truly become a luxury brand, Chow Tai Fook must firmly push the flat-price model, shifting the pricing focus from “gold weight” to “brand value, design value, and cultural value,” so consumers are willing to pay for the brand. This is a necessary step in transforming from a “precious metal processor” into a luxury brand.

She also notes that currently, Chow Tai Fook’s high-end positioning mainly relies on “high-end elements driving premiums and sales,” and has not yet established a true luxury barrier. To achieve luxury status, the brand needs to create scarcity through limited editions, exclusive designs, and bespoke services, maintain long-term price stability, reduce discounts, focus on core high-end customers, and build a unique Chinese luxury brand culture to differentiate itself from international luxury brands.

Beijing News Shell Finance Reporter: Qu Xiaoyi

Editor: Wang Jinyu

Proofreader: Liu Baoqing