Investment demand fuels China's gold buying

Shoppers crowd jewelry counters during major Chinese holidays, yet a noticeable shift is unfolding across retail outlets nationwide: sparkling gold ornaments are losing ground to plain gold bars and coins.

For ordinary households, gold is evolving from a festive gift or fashion statement into a favored store of household wealth.

For Fu Hao, a 35-year-old marketing manager in Beijing, the calculation has entirely changed.

While he once purchased intricately designed gold bracelets for family milestones, he now opts for unadorned bullion.

"The premiums you pay for jewelry craftsmanship just aren't worth it anymore," Fu said shortly after purchasing a 50-gram investment bar at a local bank.

"We want our purchases to hold their pure value. It may not be wearable, but a plain gold bar provides real peace of mind."

This retail trend mirrors a far-reaching strategic shift, according to a recent report by S&P Global. Far from a short-term rush, China's growing engagement with gold spans household asset allocation, domestic mining expansion, central bank reserve building, cross-border financial infrastructure, and outbound resource investment — all unfolding against a broader wave of gold accumulation across emerging economies.

Chinese buyers are re-prioritizing gold bars and coins over decorative jewelry, with many families now viewing physical gold as an alternative safe-haven asset, according to the industry data released by the China Gold Association.

This structural divergence is becoming increasingly pronounced. According to the CGA, China's gold consumption reached 511.41 metric tons in the first half of 2026, up 1.23 percent year-on-year. However, demand for gold jewelry plummeted 33.88 percent to 132.13 tons, while robust investment demand pushed the consumption of gold bars and coins to 339.34 tons, surging 28.42 percent.

Periodic price pullbacks have consistently stimulated sales of gold bars through domestic banking channels, cementing them as a popular hedge against market risks.

"This demand cannot be suppressed, even with gold prices at historical highs," said Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management.

"Investor anxieties about geopolitical situations and tariff wars have intensified, leading to a gold market rush to balance asset portfolios and hedge against risks," he said.

This consumer phenomenon is not unique to China. S&P Global data point to similar patterns across emerging markets: retail investors are cutting spending on ornamental gold while lifting investment-grade gold purchases when geopolitical and domestic economic risks rise.