A “golden era” for gold is unfolding! Karen Karniol-Tambour, Co-Chief Investment Officer of Bridgewater Associates, has said that as global de-dollarization continues, gold may be at the beginning of a sustained growth phase—”there is still significant upside.” Recently, the spot price of gold broke through $3,690 per ounce, approaching record highs. From upstream mining companies to midstream brands, a wealth narrative led by gold has officially begun.
Three Major Drivers of the Gold Bull Market
With a cumulative increase of 40% year-to-date, the surge in gold prices is no coincidence.
Data Source: Trading Economics
1. Market expectations of Federal Reserve rate cuts
Last week, the U.S. Federal Reserve implemented its first 25-basis-point rate cut of the year and indicated that further rate cuts are likely. The market generally anticipates two more 25-basis-point cuts in October and December. Rate cuts reduce the opportunity cost of holding gold, making it a more attractive investment option.
2. Escalating geopolitical risks
Tensions continue to rise in regions such as the Middle East and Ukraine. Additionally, the economic and political impacts of tariff policies under former U.S. President Trump have made investors uneasy about the global economic outlook. As a result, gold, viewed as an effective hedge against inflation and currency depreciation, has attracted a significant influx of capital into safe-haven assets.
3. Soaring central bank demand for gold
In 2024, global central banks purchased over 1,086 tonnes of gold—setting a historical record. The increase in central bank purchases reflects a recognition of gold’s value as a reserve asset, further pushing prices upward.
Upstream Rush for Gold: Global M&A Accelerates Among Mining Companies
Over the past three years, the continued rise in gold prices has had far-reaching effects across the entire industry chain. Upstream gold mining enterprises have seen explosive growth in performance. Some companies have further strengthened their global capabilities through capital operations, accelerating their global resource deployment.
The increase in gold prices has directly boosted the profitability of gold mining companies. Among A-share listed companies, China National Gold (601899.SH) and Shandong Gold (600547.SH) have seen their share prices rise by over 30% and 25%, respectively, by mid-September.
Against this backdrop, gold mining companies are actively pursuing resource integration and mergers & acquisitions to enhance their competitiveness.
Chifeng Jilong Gold Mining (600988.SH), for example, completed its dual listing on the Hong Kong Stock Exchange (“A+H”) in 2024, raising HKD 2.676 billion (approx. USD 341 million / KRW 466.7 billion). About 40% of the proceeds are planned for domestic and overseas mining project development over the next three years.
Zijin Mining (601899.SH) has spun off its international gold mining arm, Zijin Gold International, for a separate listing on the Hong Kong Stock Exchange, aiming to raise HKD 24.984 billion (approx. USD 3.18 billion / KRW 4.43 trillion). The funds will primarily be used to ramp up global gold mine acquisitions, expand existing mine capacities, and widen exploration scope.
Midstream Transformation: Gold Brands Adjust Strategies to Capture the Market
Midstream gold and jewelry brands are also actively responding to the challenges and opportunities brought about by rising gold prices.
Chow Tai Seng: Embracing the “Second Curve” of Gold Business
Recently, Chow Tai Seng (002345.SZ) submitted its IPO prospectus to the Hong Kong Stock Exchange. The gold business has taken on the task of boosting revenue as growth in the jewelry market slows. It also represents the company’s ambition to embrace the gold boom and evolve toward an “Oriental fashion” strategy.
Chow Tai Seng’s Key Success Factor (KSF) lies in its flexible product and market strategies.
Since 2023, the company has restructured its product line classification—not simply by piece count or weight, but based on style and craftsmanship. For instance, premium collections like Zhenjin·Zhenzuan, Intangible Cultural Heritage Filigree, and the Zhenjin·Fan Hua series co-developed with the Forbidden City Museum are priced per item regardless of weight due to their high cost and unique techniques, simplifying the sales process.
Its product development process is also highly flexible. Tasks that do not involve in-house design are delegated to the buyer department, which closely collaborates with factories in the Shuibei district. In-house design efforts are managed by a style committee composed of senior managers from supply chain, product R&D, and product line departments. Additionally, a “blockbuster project team” has been set up to track potentially viral styles or materials in the market. This team, led by the marketing center and reporting directly to the general manager, bypasses regular complex workflows to communicate directly with factories for fast production and market launch.
On the sales side, Chow Tai Seng practices localized pricing strategies. For gold products priced by weight, the company has set a national standard weight threshold at 5 grams. However, considering consumer preference for lighter weights in East and South China, the threshold there has been adjusted to 3 grams. Also, as a franchise-dominant brand, the company in 2024 adjusted its previous fixed-cycle pricing method to real-time adjustments based on gold price fluctuations. Stores are notified one week in advance of any changes, during which price tags are reprinted and redistributed. Price updates are reflected in the system one or two days after rollout, completing adjustments efficiently.
Lao Pu Gold: High-End Strategy Rooted in “Emotional Consumption”
In addition to seizing the young consumer market through personalized products, “enhancing high-end brand storytelling” has become another key strategy for gold jewelry companies under the trend of emotional consumption—Lao Pu Gold is a prime example.
Lao Pu Gold’s KSF lies in its deep cultivation of traditional “ancient gold craftsmanship” and its luxury-oriented offline service model, which enhances the added value of its products.
Recently, observers noted Bernard Arnault, Chairman of LVMH Group, visiting Lao Pu Gold’s store at Shanghai’s IFC Mall during his China tour. He carefully examined gourd-shaped pendants, crosses, and other gold ornaments on display, reportedly remarking, “Very delicate, very interesting.”
According to BCC Global Research, using core offline joint-venture partner SKP as an example:
At Beijing SKP, Lao Pu Gold’s 2025 full-year sales target was set at CNY 900 million (approx. USD 123.3 million / KRW 166.4 billion) at the beginning of the year. In Q1 alone, it achieved CNY 760 million (approx. USD 104.1 million / KRW 140.5 billion) in sales—over 84% of the annual target. This dramatic growth, dubbed “terrifying growth,” was due to underestimating gold price hikes and brand price adjustments.
BCC experts noted that consumer motivation for purchasing Lao Pu Gold has shifted from traditional craftsmanship appreciation to value preservation. Lao Pu’s clientele more closely resembles luxury goods consumers, with a high degree of recognition for the cultural and collectible value of its products. Compared to traditional brands like Chow Tai Fook, Lao Pu Gold holds a differentiated edge in product lines themed around Tibetan Buddhism, among others.
Moreover, Lao Pu Gold has shown significantly higher cooperation in mall promotional events than other luxury brands. These include active participation in promotions such as 10x reward points, or CNY 300 off every CNY 1,000 spent, effectively enhancing foot traffic and conversion rates.
Future Outlook: Toward a $4,000/oz Gold Era?
According to Deutsche Bank, if the U.S. Federal Reserve continues its rate-cutting cycle, the price of gold may break through $4,000 per ounce in 2026. As gold prices rise, they not only drive corporate earnings but also accelerate industry consolidation and business model innovation.
The golden era of gold is far from over.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.