Gold jewellery stocks continued their downward trajectory in today's trading session. At the time of writing, LAOPU GOLD (06181) shares had fallen 4.08% to HK$479.6. CHOW SANG SANG (00116) declined by 3.39% to HK$10.27, while LUK FOOK HOLD (00590) dropped 1.65% to HK$20.24. CHOW TAI FOOK (01929) shares were also lower, down 1.29% at HK$11.46.

Market Context and Price Action

The weakness in the sector follows a significant pullback in gold prices, driven by expectations for further interest rate hikes following strong US non-farm payrolls data. This has led to substantial price cuts from major jewellery retailers. On June 6, brands including Chow Sang Sang, Lao Miao Gold, and Lao Feng Xiang implemented major price reductions for their gold jewellery products.

Compared to their yearly highs, the per-gram prices for these three brands have fallen by approximately 393 yuan, 401 yuan, and 397 yuan, respectively, representing a decline of 23% for each. This steep drop has effectively erased all gains made earlier in the year, bringing current prices back to levels seen at the end of 2025.

Analyst Perspectives on the Sector

Analysts have highlighted structural shifts and risks within the industry. One securities firm noted that high gold prices are driving a change in industry dynamics, characterised by a contraction in jewellery tonnage sales, an increase in investment gold volume, and overall growth in retail value. This pattern suggests that the quality of industry growth may be lower than what the surface-level retail sales figures indicate.

Another securities analyst warned of specific risks in the gold jewellery segment. In the current environment of elevated gold prices, the volume of gold jewellery consumption continues to decline, which could put pressure on the profitability of listed companies in this sector.