Strong demand for gold and watches drives luxury sales to HK$ 45.8 billion, the highest level since 2019
Wealthy mainland consumers turn to tangible assets amid tighter capital controls and tax scrutiny
Sales of jewellery and watches in Hong Kong rose by 22 per cent in the first nine months of the year, driven by demand for gold and precious stones from wealthy mainland Chinese individuals amid tighter scrutiny of overseas investments.
According to official data cited by Bloomberg, sales of jewellery, watches, and luxury items reached HK$ 45.8 billion (US$ 5.9 billion), the highest figure recorded since 2019.
This growth far outperformed overall retail sales, with the sector accounting for approximately 15 per cent of total retail turnover in the territory.
Jewellery sales maintained double-digit growth in the last quarter, even as spending on luxury goods dropped by more than 10 per cent in mainland China.
Capital controls drive search for financial safety
The trend reflects a shift in priorities among China’s wealthiest consumers, who are seeking to preserve their capital in response to stricter tax scrutiny of offshore assets and tighter capital controls imposed by Beijing.
Gold and precious stones have gained appeal as a store of value at a time when the prolonged slump in China’s property sector continues to weigh on household wealth and the stock market recovery has lost momentum.
“People are increasingly interested in seeking safety because they are concerned about recent tax policy changes,” said Manna Wang, a Hong Kong insurance broker quoted by Bloomberg.
“They want to be absolutely sure that their wealth will not suffer major disruptions in the future. High returns are no longer the priority,” she added.
Regulatory shifts redirect luxury spending
In recent months, Chinese authorities have restricted initial public offerings (IPOs) by mainland companies in Hong Kong, tightened controls on overseas stock trading, and intensified oversight of offshore trusts and international insurance products.
According to Wang, clients who previously sought high-yield insurance products are now asking her for advice on buying gold jewellery, with individual spending reaching up to US$ 15,000 per person.
The appreciation of the Chinese yuan and Hong Kong’s tax-free regime, which levies no sales tax, have also contributed to boosting demand.
Jewellery prices in the territory can be more than 5 per cent lower than those in mainland China, according to the broker.
Global luxury brands expand local footprint
The rise in international gold prices, which hit record highs this year, also contributed to the increased sales value,explained Alexis Bonhomme, Chief Executive Officer at luxury consultancy Trinity Asia.
However, demand remained robust even after the recent pullback in precious metal prices.
Strong demand has prompted several international brands to expand their presence in Hong Kong, including Swiss watchmaker Audemars Piguet, Italian jeweller FOPE, as well as Tiffany & Co. and Van Cleef & Arpels.
“Fine jewellery and gold offer security and durability,” stated Bonhomme.
“Wealthy clients are prioritising items with intrinsic and lasting value. They are scaling back purchases of seasonal fashion at home, but when they travel, they are willing to invest significant sums in jewellery and gold as tangible assets,” he added.
