Gold demand rediscovers its shine after making comeback since December 2022

China’s gold demand has seen a remarkable seasonal rebound since December 2022. During the Spring Festival holiday, which ran from Jan. 21 to 27, gold consumption boomed, as indicated by the long lines of people at gold stores in many shopping malls.

A customer selects gold jewelry at a gold jewelry shop in a shopping mall in Hohhot, capital of north China’s Inner Mongolia Autonomous Region. (Photo/Ding Genhou)

On Jan. 31 after the Spring Festival holiday, crowds of gold buyers were still seen waiting in long queues in front of cashier counters at Beijing Caishikou Department Store, a leading gold jewelry retailer in the city. An employee at the retailer said that purchases of its gold jewelry products thrived during the New Year’s Day holiday and the Spring Festival holiday.

Beijing Caishikou Department Store Co., Ltd. disclosed on Jan. 30 that it had seen a remarkable recovery of customer flow and sales of gold jewelry products since the end of December 2022, thanks to China’s optimized COVID response and booming consumption demand during the two holidays.

Gold jewelry retailers at Gongmei Emporium in downtown Beijing’s Wangfujing Street held a number of promotions for shoppers. According to an employee of Gongmei Emporium, sales revenues of its own gold brands approached 10 million yuan (about $1.47 million) during the two holidays, with rabbit-themed gold bars and jewelry products being particularly popular.

During the seven-day Spring Festival holiday, gold jewelry consumption in Shanghai reached 875 million yuan, the Shanghai Gold & Jewelry Trade Association said.

Photo shows a rabbit-themed gold product at a gold jewelry shop in Suzhou city, east China’s Jiangsu Province. (Photo/Wang Jiankang)

Wang Lixin, regional CEO of the World Gold Council (China), analyzed that economic recovery has laid a foundation for the rebound of gold jewelry consumption, while consumers’ increasing attention to gold’s role as a safe-haven asset is another important factor.

The younger generation in China is emerging as the main driving force propelling the country’s gold consumption.

Industry insiders attributed the trend to gold brands’ efforts to cater to young people’s buying preferences by improving the workmanship and design of their products. For example, some gold jewelry companies have rolled out new gold jewelry series in collaboration with the Palace Museum and Disney, which have become increasingly popular among young people.

China’s demand for gold jewelry and investment is expected to pick up in 2023, buoyed by the country’s economic recovery and rising household disposable incomes, Wang said.

Continuous efforts made by Chinese commercial banks to promote physical gold sales will boost demand for the precious metal, and gold’s role as a safe-haven asset will continue to attract investors, according to Wang.