China’s gold market showcases significant evolution throughout 2024-25, with domestic production rising 0.56% to 377.24 tonnes despite total consumption declining 9.58%. While traditional jewellery demand dropped sharply by 24.69%, investment-driven demand for gold bars, coins, and ETFs demonstrated remarkable strength. The People’s Bank of China continues building reserves, reaching 2,290 tonnes. These shifting dynamics signal fundamental changes in how Chinese investors and consumers view the precious metal’s role in their portfolios.
The glittering landscape of China’s gold market reveals a complex interplay of shifting consumer preferences and investment trends throughout 2024 and early 2025. While domestic production marginally increased by 0.56% to 377.24 metric tonnes, overall consumption patterns underwent significant transformations, with total consumption declining by 9.58% to 985.31 tonnes.
China’s gold market showcases dramatic shifts as production inches up while consumption falls sharply, highlighting evolving market dynamics in 2024-25.
A notable development has been the divergent trajectories of different market segments. The jewellery sector experienced a sharp contraction, with demand plummeting by 24.69% to 532.02 tonnes, reflecting changing consumer behaviours and market saturation. This decline has prompted major retailers to reassess their expansion strategies, with some actively reducing their physical presence in response to evolving market dynamics. Furthermore, the latest gold prices in Brazil indicate how the shifting consumer preferences are affecting the overall market performance. Additionally, central bank policies on gold have influenced global pricing and demand, with implications for local market conditions.
In contrast, investment-driven demand has shown remarkable vigour. Gold bar and coin purchases surged by 24.54% to 373.13 tonnes, while gold ETFs witnessed unprecedented growth. February 2025 marked a milestone with record-breaking ETF inflows of RMB14bn, pushing total assets under management to an impressive RMB89bn. Despite some volatility, as evidenced by January’s outflows of RMB2.8bn, the overall trend demonstrates robust investor confidence.
The People’s Bank of China has maintained a steady approach to gold acquisition, adding 5 tonnes to its reserves in early 2025. This strategic accumulation has brought official holdings to 2,290 tonnes, representing 5.9% of total reserves. The central bank’s consistent purchasing pattern underscores China’s commitment to diversifying its foreign reserves and hedging against currency fluctuations.
Price dynamics have played a vital role in shaping market behaviour. The start of 2025 saw strong price appreciation, with the LBMA Gold Price PM rising 8% and SHAUPM in RMB increasing 5% in January. This upward trajectory continued into February, though the price strength has paradoxically contributed to reduced jewellery demand regarding tonnage.
The industrial sector has shown moderate weakness, with gold usage declining by 4.12% to 80.16 tonnes. This trend reflects broader economic adjustments and evolving industrial applications. Meanwhile, the retail jewellery market is undergoing significant consolidation, with established players adapting their strategies to address oversupply and changing consumer preferences.
Global factors continue to influence China’s gold market, with geopolitical uncertainties reinforcing gold’s position as a safe-haven asset. The widening Shanghai-London gold price spread in early 2025, driven by seasonal factors, exemplifies the market’s interconnected nature. Additionally, the current gold price in Canada can serve as a benchmark for international investors assessing gold’s value across different markets.
As the industry navigates these complex dynamics, the balance between investment demand and traditional consumption patterns will likely continue to evolve, shaping the future trajectory of China’s gold market.
Frequently Asked Questions
How Do Seasonal Festivals Impact Gold Buying Patterns in China?
Seasonal festivals considerably shape gold purchasing behaviour in China, particularly during the Spring Festival when cultural traditions drive heightened consumption.
The alignment of Chinese New Year and other celebrations creates notable demand spikes, with recent data showing a 13% year-on-year growth in 2025.
Young consumers under 30 are increasingly participating in festival-related gold purchases, whilst retailers strategically manage inventory and product offerings to capitalise on these predictable seasonal patterns.
What Role Do Chinese Millennials Play in Modern Gold Consumption?
Chinese millennials are reshaping gold consumption patterns considerably.
They favour minimalist designs and practical investment pieces over traditional ornate jewellery. Economic uncertainties and currency depreciation have driven them towards gold as a stable asset class, particularly through smaller, budget-friendly purchases.
Their preferences have prompted retailers to innovate with customisable designs and digital marketing strategies. This generation’s focus on financial mindfulness reflects a broader shift from pure aesthetics to practical value.
How Does China’s Gold Purity Standards Compare to International Markets?
China’s gold purity standards are remarkably rigourous compared to international markets.
While the US maintains a 0.3% negative tolerance and European standards typically max out at 999 fineness, China pushes boundaries with ultra-high purity grades like 99999 for industrial applications.
Though China allows a more flexible 1% tolerance for consumer gold, its technical standards often exceed global norms, particularly in advanced sectors like semiconductors and aerospace technology.
Which Chinese Regions Show the Highest Growth in Gold Investment?
Based on recent market analyses, Shanghai and Guangdong demonstrate the strongest growth in gold investment across China.
Shanghai’s dominance stems from hosting the Shanghai Gold Exchange, whilst Guangdong benefits from its proximity to Hong Kong’s trading hub.
Following closely are Jiangsu and Shandong provinces, where rising disposable income and robust financial infrastructure drive increased gold purchases.
The Sichuan-Chongqing region is emerging rapidly, particularly in retail gold investments.
What Percentage of China’s Gold Reserves Are Privately Held?
Based on recent data, approximately 83% of China’s total gold reserves are privately held, representing 24,698 tonnes of the estimated 29,727 tonnes total.
This significant proportion reflects the Chinese government’s encouragement of private gold ownership through initiatives like the Shanghai Gold Exchange.
Cultural preferences, rising incomes, and a strong desire for wealth preservation have contributed to this substantial level of private holdings amongst Chinese citizens.
