China's gold consumption patterns diverge amid volatile prices

BEIJING - China's gold market saw divergent demand trends in the first half of 2026, with jewelry consumption declining and investment demand remaining strong amid high prices and new tax policies, industry data showed Thursday.

Gold consumption rose 1.23 percent to some 511.41 metric tons during the first six months, according to the China Gold Association. By category, gold jewelry consumption fell 33.88 percent to 132.13 tons, while gold bar and coin consumption surged 28.42 percent to 339.34 tons.

Elevated and volatile gold prices, coupled with the rollout of new gold tax policies, have reshaped domestic gold consumption patterns, the association noted. Strong investment demand has driven purchases of gold bars and coins, with temporary price corrections boosting gold bar sales through banks.

Meanwhile, consumption of gold for industrial and other uses declined 2.9 percent to 39.94 tons, as high prices have pushed up costs for industrial users, weighing on industrial gold consumption.

During the January-June period, China produced 152.91 tons of gold, down 14.62 percent from a year earlier, the data showed.

The association said the decline in domestic output was partly due to temporary production halts at some mines as major gold-producing regions carried out safety inspections and rectification campaigns. Meanwhile, the overseas production capacity of major Chinese gold companies continued to expand, with their overseas mined gold output rising 21.43 percent year-on-year to 48.1 tons in the period.

China added 40.12 tons of gold to its reserves in the first half of 2026, bringing its gold reserves to 2,346.45 tons by the end of June, ranking fifth globally. Since November 2024, China's central bank has increased its gold holdings for 20 consecutive months, the association noted.