Sparkling allure of gold bars and beans to young investors
Fri July 11 2025
How do young Chinese people invest in gold amid economic and stock market uncertainties? Compared with popular jewelry and exchange-traded funds, gold bars and beans are attracting more and more consumers. They are plain and simple but are seen as a way to maximize their returns.
One such young investor is Zhang, who posted on RedNote that she started buying gold beans that weigh a gram or less each since 2023. As of mid-June she had a total of nearly 70 grams.
Gold beans cost 400 yuan (HK$438) to 700 yuan each, making them “the easiest way for ordinary people to save money,” said Zhang, who was born in 2001. Besides gold beans, Zhang told The Standard that she and her boyfriend have spent more than 200,000 yuan on physical gold
A lot of other RedNote users shared their gold bean purchases, with some saying they aim to buy one piece per month.
Gold bars from banks are also on the rise, and the usual online chatter revolves around which state-owned banks are offering the lowest prices. Nearly all gold beans and bars are plain – except for small logos or seller markings stamped on the metal.
When asked whether she would purchase jewelry or gold bars, RedNote user Laicai said she would definitely choose the latter as their prices are lower relative to their weight.
For budget-conscious investors, the design and crafting of gold jewelry add extra costs – a key concern as gold prices hover at all-time highs this year.
High-end gold jewelry sales, however, do not seem to be affected much by the surging prices. For example, shares of Laopu Gold, dubbed the “Hermes of gold,” soared 1,000 percent in the past year.
Laopu’s revenue rocketed by 167.5 percent last year, while giants Chow Tai Fook Jewellery and Luk Fook both saw their revenue dropped by over 12 percent in the year ended March.
In the first quarter, China’s sales of gold jewelry shrank by 26.8 percent year-on-year to 134.5 tonnes, while that of gold bars and coins increased faster by 29.8 percent to 138 tonnes, surpassing the former, according to the China Gold Association.
In Hong Kong, the retail sales value of jewelry, watches and clocks, and valuable gifts also dropped 3.2 percent in May from a year ago.
The lower depreciation of gold bars is the primary reason people are shifting to plain investment-grade gold products.
Hong Kong gold jewelry sellers say investment-grade products can be redeemed at 8 to 9 percent below selling prices, while jewelry redemption discounts are more than 19 percent. Gold bars and coins are also about 10 percent cheaper than jewelry.
Even if consumers exchange gold jewelry, prices remain slightly higher than redemption rates, with sellers still discounting by at least 17 percent.
A Chow Tai Fook salesperson told The Standard that an additional 10 to 20 percent discount applies if exchanged jewelry is from other brands.
Banks are offering a narrower spread. A popular Chinese video content creator, LKs, shared his experience online that he sold his 10g gold bar bought from the Industrial and Commercial Bank of China at a price per gram of only 0.65 percent lower than the same-day gold price at a bank in Beijing.
|
Brand |
Gold Bars/Coins |
Gold Jewellery |
Gold Jewellery |
|
Chow Sang Sang |
8.65 |
19.60 |
10.25 |
|
Chow Tai Fook (HK, Beans) |
8.62 |
19.61 |
10.28 |
|
Luk Fook |
16.60 |
19.50 |
3.51 |
|
Luk Fook (Beans) |
8.59 |
- |
- |
|
Emperor Jewellery (Beans) |
8.62 |
19.50 |
10.16 |
|
TSL |
8.56 |
19.47 |
10.19 |
|
CTF Shenzhen (Yuan) |
15.91 |
25.35 |
11.22 |
Based on data on June 20. Compiled by The Standard.
*Data on June 27
Michelle Lam, Greater China economist at Societe Generale, noted that gold is a good investment option for young consumers if they cannot access assets like US Treasuries, when home prices are expected to stall, and the interest rates of bank deposits are approaching zero.
However, Francis Kwok Sze-chi, vice chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, cautioned that physical gold is less liquid – often stored in safety deposit boxes – unlike stocks or exchange-traded funds, which trade freely. He also warned investors to prepare for paper losses during price slumps and advised limiting exposure.
JP Morgan sees the prices crossing US$4,000 (HK$31,200) per ounce by the June quarter of next year, while Citibank expects them to fall to US$2,500 to US$2,700 in the second half of 2026 with a fading demand.
LKs, who gained about 10,000 yuan from one single gold bar within two years, told The Standard that he thinks physical gold offers lower returns than other investment products, but it is the most friendly product for ordinary people due to the limited access to the broad financial universe.
Zhang revealed that she once bought her gold beans by installments, involving about 60,000 yuan, and plans to save most of the pieces for value appreciation.
When asked about potential price drops, she said: “At least they are mentally supportive, aren’t they? The financial products are riskier for me.”
Source: https://www.thestandard.com.