Gold retailers face cash flow bind: guild head
Macau’s gold retailers are tackling a cash flow crunch amid a wave of sell-offs by residents intending to capitalise on rising gold prices, an industry professional has said.
Gold prices have, over the past six months, surged by a whopping 30 per cent, posing significant challenges to the sector, especially the small and medium-sized sellers, said Kenny Lee Koi Ian, who heads the Macau Goldsmiths’ Guild.
Speaking to reporters on Wednesday on the sidelines of a group event, Lee said that the turnover of gold products had “slowed down” at a time when high gold prices “led many residents to sell their gold”, resulting in a scenario where “buying outstripped selling”.
According to him, since Macau lacks a gold and silver trading market to deal with gold transactions, businesses are forced to either hold on to their gold stocks, risking price fluctuations – or sell directly to other markets, often at lower prices for not having sufficient quantities for refining.
The group is calling for the establishment of a resale platform or a refining facility to reduce losses.
“The lower the gold price is, the better it will be for us,” said Lee. “It makes it easier for residents to make purchases, benefiting business sales. However, due to the changing environment worldwide, it is uncertain how gold prices will fluctuate in the future.”
Despite the continuing increase in gold prices, this year’s revenue remains comparable to last year’s, he said.
However, when considering the weight of gold sold, the overall performance is estimated to have declined by about 10 per cent from the previous year.
Source: https://www.macaubusiness.com