At 3 p.m. on the 5th (local time), the flagship store of the Caishikou Department Store (菜市口百货, hereafter Caibai) in Xicheng District, Beijing. As I stepped through the first-floor main entrance, the interior was filled with heat despite the near-freezing cold outside. Instead of the usual drowsy, leisurely scene of a department store's first floor on a weekday afternoon, it was as bustling as a permanent discount outlet. Visitors chatted briskly while watching the display counters, and store staff hustled to take out products to show. It was a sight not seen on any other department store's first floor.
They were all visitors there to buy gold. Gold price boards were posted throughout the first floor, and the information desk could barely hang up the receiver amid a flood of inquiries. After days of rising, gold prices plunged recently, and with the biggest holiday, the Lunar New Year (春节), approaching, buying demand for gold increased, turning Beijing's largest gold department store into a scene of chaos.
A family looking at a 10-don pendant to gift their child said, "We plan to buy a gold pendant as both a birthday present and a holiday gift for the child. Gold is expensive now, but we think it will be even more expensive going forward," adding, "Rather, we see the recent sharp drop and brief dip in gold prices as an opportunity."
After passing the quiet second-floor pearl and diamond jewelry shops and reaching the third floor, I saw crowds as packed as on the first floor. Counters selling other jewelry such as rubies and crystal were quiet, but about 100 people formed a long line at the customer service counter. It was the line to sell gold for store credit. Although gold prices plunged at the end of last month, they spiked again within days, prompting holders to sell under the mentality of "sell before it drops further."
With fewer than 10 counters, this is not a space dedicated to buying gold; it offers services such as jewelry engraving, processing, repair, and cleaning, and provides a jewelry trade-in service only for customers who purchased the company's jewelry. But on this day, it was packed with visitors looking to sell gold. To trade in, you must take a number at a kiosk and wait your turn, but with the excessive crowds, the kiosk had become useless. Several order-keeping staff were deployed on site, busy sending visitors who had just come up the escalator to the end of the line. Visitors waiting their turn, clutching gold jewelry in one hand and copies of their IDs and payment cards in the other, wore expectant expressions.
When asked what time would be less crowded, a staffer urged, "It's like this all day. Get in line when you can." The staffer said, "Because the department store buys only up to 300 kilograms a day, you never know when the line will be cut. If you start waiting now, it will take more than 1 hour and 30 minutes, and even then it may be for nothing."
However, to sell gold here, it must have been purchased at Caibai and you must bring the sales guarantee certificate. A 43-year-old woman surnamed Jang, holding a pure gold bracelet, turned away, saying, "I no longer have the receipt, and I don't have the sales guarantee certificate with me now. I think I need to go home and look for it. If I had known they only buy with the sales guarantee certificate, I wouldn't have made a futile trip."
This department store, commonly called "Caibai," is Beijing's representative gold and jewelry department store and a traditional brand certified by China's Ministry of Commerce. According to local media, Caibai competes for No. 1 in precious metal sales in China based on a single store. The Xicheng District flagship is regarded as a barometer of private gold demand in China. After gold prices plunged recently and then briefly rebounded, strong buying and selling forces clashed on site.
According to the New York Mercantile Exchange, on the 30th of last month (U.S. Eastern time), the international spot gold price closed at $4,894.23 per troy ounce, a 9% plunge from the previous session. It was the biggest one-day drop since April 15, 2013. The decline continued on the next trading day, the 2nd of this month. Analysis emerged that Chinese investors triggered the sharp drop. After news broke that U.S. President Donald Trump had nominated Kevin Warsh, who favors monetary tightening, as the next Federal Reserve chair, Chinese speculative capital moved to sell on concerns the gold rally would stall. Alexander Campbell, who served as head of commodities at the world's largest hedge fund, Bridgewater Associates, told foreign media, "China sold, and now we are experiencing the aftershocks."
However, on the 3rd, just a day later, gold jumped more than 5%, reclaiming the $5,000-per-troy-ounce level. Since then, prices have fallen again, and as of 11 a.m. Korea time today, gold is trading at $4,772.12 per troy ounce. In the long run, the surge appears to have eased, entering a correction phase. Major banks predicted that after volatility, gold would trend upward. Deutsche Bank, Bank of America (BoA), Société Générale, and JPMorgan said gold could top $6,000 within this year.