(Yicai) Oct. 27 -- Despite the recent decline in international gold prices, leading Chinese jewelry retailers have raised their product prices.

Laopu Gold raised its prices yesterday, with many products seeing an increase of around 20 percent. This marks the third price hike by the luxury jewelry brand this year.

Chow Tai Fook Jewellery also announced an increase in the retail prices of its fixed-price gold products recently, with most products expected to see a price hike of 12 percent to 18 percent.

London spot gold, which reached a high of USD4,381.29 per ounce on Oct. 20, has since declined. The global benchmark for gold and gold derivatives closed at USD4,112.82 during the last trading day, down 0.3 percent.

The supply and demand dynamics of the physical jewelry market do not determine gold prices -- rather, price fluctuations have a stronger influence on the retail side, Song Jiangzhen, director of the market research center at the Guangdong Southern Gold Market Academy, told Yicai.

Song explained that the price of gold jewelry mainly comprises raw material cost, processing fee, and brand premium. Although spot gold prices have recently declined, leading brands have raised retail prices to increase processing margins and stabilize overall profitability.

Jiang Han, a senior researcher at the Pangoal Institution, said brands such as Laopu Gold and Chow Tai Fook are leveraging their brand influence to reinforce the perception that “gold equals value preservation.” Raising prices amid falling gold rates helps boost store-level revenue and profits in the short term.

However, Jiang cautioned that if gold prices continue to decline or inflation expectations ease, previously front-loaded demand for wedding and investment-related purchases could fade, leading to slower retail sales and growing inventory pressure on brands.

Even if spot gold prices continue to fall, leading brands are expected to maintain a high proportion of premium products, Jiang added. These companies have built a pricing logic centered on cultural value and design identity, relying more on experiential marketing than price competition to attract consumers.

According to the China Gold Association, gold jewelry consumption in China fell 26 percent year on year in the first half. Yet, during the same period, major gold brands achieved counter-trend growth -- for instance, Chow Tai Fook reported a 4.1 percent rise in group retail value in the second quarter.

Editor: Emmi Laine