Waning Demand
WGC sees tepid consumer confidence weighing on China gold jewellery demand
This story was originally published at 13:25 IST on 17 July 2025
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MUMBAI – Tepid consumer confidence and consolidation in gold prices may continue to weigh on gold jewellery demand in China, Ray Jia, research head (China) at World Gold Council, said in a report. However, Jia expects investment demand for the precious metal to be healthy in China in the coming months.
"Seasonal weakness, tepid consumer confidence and the elevated gold prices continued to (put) pressure (on) gold jewellery consumption, leading to a cautious stance from retailers on restocking. Added to this was June's cooling momentum in bar and coin investment as investors sat on the sidelines amid the range-bound gold price movement," Jia said.
Chinese gold exchange-traded funds recorded inflows of $137 million in June. With US-China trade tensions easing, safe-haven demand for gold cooled in June, resulting in limited changes in ETF flows, Jia added. Chinese gold ETFs registered their strongest semi-annual performance in the first half of 2025, adding $8.8 billion. Chinese gold ETFs' total assets under management surged 116% during the first half of the year, reaching $21 billion by the end of June. Meanwhile, collective holdings jumped 74% to 200 tonnes, Jia said.
The People's Bank of China bought 2 tonnes of gold in June, the eighth consecutive month of buying the precious metal. China's official gold holdings now stand at 2,299 tonnes. "China has announced non-stop gold purchases – of varying amounts – during the first half of 2025, totalling 19 tonnes," Jia said. During this period, the share of gold in China's total foreign exchange reserves rose to 6.7% at the end of June from 5.5% in December 2024, Jia added.
China imported 89 tonnes of gold in May on a net basis, down 21% on-month and 31% on year, reflecting the lower wholesale demand trends in the country. "In general, weakening gold jewellery demand so far this year has weighed heavily on imports," Jia said. End
US$1 = INR 85.94
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Reported by Ashutosh Pati
Edited by Nishant Maher
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