Although today the market is dominated by algorithms and instant information flow, traditional assets still manage to surprise.
Impressive results on the wave of gold mania
The Friday session delivered a spectacular rally in Chow Tai Fook shares. The Hong Kong company’s stock rose by an impressive 15,38%.
What sparked this market euphoria? The official annual report for the year ending March, which turned out to be a true display of strength. The jewelry giant produced a record net profit attributable to shareholders of as much as 9 billion HKD, which translates to about 1.15 billion USD.
That’s a massive jump of over 50% year‑on‑year, surprising even the most confident analysts. Operating profit also looked impressive, closing at 18.9 billion HKD, marking a 27.8% year‑on‑year increase. While digital markets struggle with volatility, physical gold shows class.
A precious metal has always provided a sense of security, but managing a global business requires precision worthy of a Swiss watchmaker.
Karen Yih, chief financial officer (CFO) of Chow Tai Fook, on CNBC’s “Squawk Box Asia” explained the reasons for success without sugarcoating. Rising metal prices directly improved overall profit margins and boosted gross profits from pure‑gold products priced by weight.
The raw material is not everything, and the key to success turned out to be a well‑thought‑out strategy.
The company perfectly tapped into current trends, offering proprietary collections focused on unique design. The Chinese economy is undergoing a specific revival shaped like the letter “K”, indicating strong de‑layering. Chow Tai Fook leverages this perfectly.
Exclusive jewelry at a fixed price, characterized by high margins, sells wonderfully. The biggest demand comes from top‑tier metropolises in China and international markets. Consumers seek prestige, and this demand is resilient to turbulence, even with high gold price volatility.
See also: Central banks are rushing to gold. XAU/USD still disappoints
Citi’s geopolitical rollercoaster forecast
Citi analysts are not shy of admiration, and their Thursday report heated up the atmosphere. Chow Tai Fook’s 2027 forecast clearly beat market expectations for sales and margins.
Citi estimates the giant will see further net profit margin growth in 2027 thanks to opening more luxury, proprietary stores and promoting flagship collections.
Looking at gold charts, the metal recorded a powerful jump at the turn of 2025 and 2026, as investors sought safety amid macroeconomic uncertainty. The situation changed dramatically after the outbreak of war in Iran, from which the gold price fell by about 20%. For the jewelry empire, this discount became a fuel for growth.
Although gold prices have recently dipped sharply, on June 12 the precious metal is climbing toward the psychological barrier, reaching a level of 4195 USD per ounce.
Chart. Spot gold price (XAU/USD)
Source: Trading Economics.
See also: How to buy gold safely? A guide for beginner investors
Source: CNBC.
