China Gold Consumption Declines as Jewelry Sales Crash

Gems News: Gold Demand Weakens Amid Record Prices

China’s appetite for gold has shrunk notably this year, with total consumption dropping by 8 percent in the first nine months of 2025 compared to the same period last year. The decline was largely due to a dramatic 33 percent plunge in gold jewelry sales, according to the latest figures released by the China Gold Association. This Gems News report highlights how soaring gold prices and shifting consumer habits are reshaping one of the world’s largest markets for the precious metal.

Gold jewelry sales plunge in China as investors shift toward bars and coins amid record prices and market uncertainty. Image Credit: StockShots

Jewelry Sector Takes the Hardest Hit

Between January and September, China’s total gold consumption stood at 682.73 tons. Of this, jewelry accounted for 270.036 tons—down sharply as consumers turned away from expensive adornments amid record prices. In contrast, demand for gold bars and coins surged 25 percent to 352.116 tons, reflecting investors’ growing preference for safe-haven assets during a time of geopolitical instability and economic uncertainty. Industrial and other gold uses rose slightly by 2.7 percent to 60.578 tons, driven by the growing electronics and renewable energy industries.

Record Prices Fuel Investment but Hinder Retail Sales

The London spot gold price soared to USD3,825.30 per ounce by the end of September, nearly 45 percent higher year-to-date. On the Shanghai Gold Exchange, Au9999 closed at CNY871.86 (USD122.47) per gram, up 42 percent over the same period. These record-breaking prices made gold a lucrative investment but a difficult purchase for retail buyers seeking jewelry, particularly middle-class consumers facing tighter budgets.

Production and Trade Indicators Rise Despite Weak Demand

Interestingly, domestic gold production in China increased 1.4 percent to 271.782 tons, while imports climbed 8.9 percent to 121.149 tons, bringing the total supply to 392.931 tons—up 3.6 percent. Large Chinese mining companies extracted 61.439 tons overseas, representing an 18 percent rise from last year. Gold trading activity also grew, with 23,800 tons exchanged on the Shanghai Gold Exchange, marking a 2.5 percent increase in volume and a 42 percent jump in value to CNY17.68 trillion (USD2.48 trillion). Futures and options trading also hit new highs, signaling strong speculative and hedging interest despite weak consumer demand.

Market Outlook

Analysts note that while jewelry consumption remains subdued, China’s gold investment sector continues to thrive on volatility, inflation fears, and global political tension. The divide between ornamental and investment demand underscores a market transition that could reshape gold’s traditional role in China’s economy. As consumer sentiment remains cautious, the industry’s future growth may increasingly depend on investor-driven demand rather than traditional jewelry sales.

Overall, the data reflects both resilience and realignment within China’s gold industry, with the investment sector compensating for the jewelry market’s slowdown.

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