CBN Special丨China’s Gold Rush: Gen-Z drives latest buying sp(2)

Young Chinese aged between 25 and 34 have become the main force of gold consumption, with their proportion at 59 percent in 2023. In the future, consumers under the age of 25 will become new major gold buyers, the association predicted.

With the dramatic rise in international gold prices, many Chinese investors are looking with interest at the yellow metal, an investment where risks and opportunities coexist.

Consumption of gold, whose appeal had once waned as Chinese consumers favored diamonds and other gems, has remained robust during the Spring Festival holiday despite elevated prices.

As the world's largest precious metals market geared up for the Chinese New Year celebrations this year, gold jewelry and the Year of the Dragon gold bars have emerged as the most popular products, according to the China Gold Association.

Boosted by a series of policies aimed at stimulating consumption, the domestic consumer market has recovered steadily, with gold and silver jewelry emerging as the fastest-growing categories among various retail segments through last year, it said.

Gold jewelry processing and retail enterprises in China have also continuously innovated in the design of gold products, driving the increased demand for gold jewelry. Gold bars and coins with relatively lower premiums have also been favored by consumers seeking physical gold investments, said the association.

In 2023, the country's gold consumption rose 8.78 percent year-on-year to 1,089.69 metric tons, according to data from the association. Of the total, gold jewelry consumption hit 706.48 tons, a year-on-year increase of 7.97 percent, while gold bars and coins touched 299.6 tons, up 15.7 percent year-on-year. Gold production, meanwhile, rose 0.84 percent year-on-year to 375.15 tons, it said.

Gold has long been recognized as a valuable financial hedge. A study by the World Gold Council (WGC) reveals that, over the past three decades, gold has yielded an annualized return of 5.8 percent. This eclipses mainstream assets like cash and bonds during the same time period. And during five of the past seven economic downturns, gold has thrived, aiding investors in mitigating overall portfolio losses.

Gold has increased by more than 600 percent since the start of the millennium, but adjusted for inflation, it remains below the peak of US$850 reached in January 1980, which is equivalent to more than US$3,000 in today’s currency.

As the global economy faces increasing challenges and financial market volatility intensifies, the hedging demand for gold is clearly on the rise. China is the leading driver for both consumer demand and central bank gold purchases, and the country’s not likely to slow down. 

According to data from the WGC, China overtook India to become the world’s largest gold jewelry buyer in 2023. This gold-buying spree continued to stay strong for 16 consecutive months in February 2024, as the People's Bank of China added roughly 390,000 ounces of the key metal, according to government data. In total, China's central bank now holds 72.58 million ounces of gold, or roughly 2,257 tons. 

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI 

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