China's 'Gold Fever' Investing Beats Jewelry Demand
Tuesday, 4/29/2025 13:08
Gold bar and coin investment hits fresh record in No.1 consumer...
A SURGE in China's gold investing demand saw sales of bars and coins overtake jewelry in the first 3 months of 2025, according to new data from the China Gold Association.
The January-to-March period includes the key Chinese New Year holidays, now the world's heaviest household gold-buying festival, beating India's autumn festival-of-lights, Diwali.
China's
gold coins and retail investment bar purchases totalled 138 tonnes according to Monday's CGA data, rising 29.8% from Q1 last year.
Demand for gold jewelry, in contrast, sank 26.9% year-on-year by weight to less than 135 tonnes during the first quarter of 2025.
China's household investing in small bars and coins overtook jewelry purchases last spring as well, when
2024's surge of Chinese gold trading coincided with global prices jumping to new all-time highs at $2400 per Troy ounce.
Both China's domestic and global gold prices have since risen by more than 1/3rd again, peaking at $3500 this April as global stock markets sank in the face of returning US President Donald Trump announcing massive 'Liberation Day' trade tariffs on goods imported into the USA.
"Suppressed by
high gold prices, demand for gold jewelry continues to be weak," says the government-mandated Chinese gold trade body in
its Q1 report.
"[But] the complex and ever-changing geopolitical situation and economic uncertainty have further highlighted the hedging and value-preserving function of gold. Private investment demand for gold bars and gold coins has grown rapidly and substantially."
By value, and calculated using the Shanghai Gold Exchange's 3-month average, jewelry demand was virtually unchanged in January-to-March from the first quarter of 2024, reaching ¥90 billion based on the CGA's weight data.
Gold coin and bar demand in contrast leapt 77.9% year-on-year to a new record above ¥92bn, equivalent to $12.7bn.
China's gold-backed ETF trust funds also saw heavy inflows, the CGA notes, with the quantity of bullion needed to back their shares in issue swelling by 1/5th.
Dominating the Asian market for
gold ETFs but still only a fraction of the sector worldwide, China's gold ETFs have
since continued to grow rapidly in April as both Chinese and global gold prices ran to new all-time highs.
"Bank gold trading volume has also increased significantly," says China Business News, with smartphone gold trading apps a focus for "gold fever" according to other Chinese news sites and social media posts.
"We're seeing day-trading behavior typically associated with speculative stocks now appearing in what was traditionally considered a conservative investment," says Dr.Liu Feng, a finance professor at Peking University.
"Transaction sizes have decreased while frequency has increased," says Australian mining news and analysis site Discovery Alert, "hallmark signs of retail rather than institutional participation" with the Shanghai Gold Exchange now seeing trades of less than 100 grams account for 3/5ths of all transactions, up from 35% in 2023.
Over the last 2 years, the Yuan price of gold has risen by 77.6%. That's taken the SGE price of 100g up from ¥44,300 (then equal to $6,410) to ¥78,200 (now $10,750), equal to 3 months'
average disposable income in Shanghai, the country's highest-wage city.
Borrowing to trade gold has become "a hot topic" on Chinese social media according to the
Shenzhen Business Daily.
Banks are "intermittently" showing physical gold coins and small bars as "out of stock", says China Business Network, with branches in Shenzhen requiring would-be buyers to book an appointment online or through the bank's smartphone app.
Separate estimates for China's Q1 gold investment and jewelry demand are due out Wednesday this week, when the gold mining industry's London-based World Gold Council issues its global
Gold Demand Trends report for January-to-March.
Using data gathered by specialist analysts Metals Focus, the WGC's total figure for Chinese household demand lagged the CGA's total number by almost 7% for 2023 and 2024.
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