HK jeweller cashes in on gold; stock soars

(Adds details, comment)

By Polly Yam

HONG KONG, Jan 4 (Reuters) - Hong Kong jewellery and gift maker and retailer Hang Fung Gold Technology Ltd (0870.HK) has sold a tonne of gold, worth around US$27.5 million, sending its shares up 26 percent to a record high on Friday after the price of the precious metal set a new peak.

Chairman Sai Wing Lam said the company had another 5 tonnes of gold and might sell some of that as prices could rise to $900 an ounce next month.

"We sold 1 tonne at about $855 per ounce," Lam, an energetic industrialist with a strong interest in Chinese culture, told Reuters in a telephone interview.

The company had bought the gold for about $450 an ounce.

"We will sell (more) if the price is right. There's no timetable, it depends on prices," Lam said. "We expect the price to reach $900, then $1,000, or even $1,100."

Hang Fung, whose exhibits include a bathroom containing 380 kgs of gold bought at $248 per ounce, said it wanted to keep about 1.5 tonnes of gold, leaving about 3.5 tonnes available for sale. It said it would sell a tonne at a time.

"We will not sell it all at once," Lam said.

The company had melted 1 tonne of gold exhibits into bars with 99.99 percent purity for the sale in the Hong Kong market on Thursday, he said.

Investment funds are flocking to gold as a hedge against inflation and a weaker U.S. dollar. Its safe-haven status has been further enhanced as crude oil futures have topped $100 a barrel, driving the dollar down.

In March, the company sold a gold carriage made from about 472 kgs of gold, added Vivian Lai, senior corporate communications manager.

Established in 1979, Hang Fung is consolidating six halls into a single exhibition room to reduce its gold exhibits. It expects to complete the move within a year, Lai said.

Shares in Hang Fung gained about 6 percent on Friday morning, matching the sector's gains as gold prices closed in on record highs set overnight in New York.

Those gains quickened after Lam's comments, and the stock closed up 26.1 percent at HK$2.52, adding more than US$60 million to the company's market value.