China gold jewellery sector may see seasonal weakness in coming months, says WGC
This story was originally published at 21:00 IST on 13 March 2026
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MUMBAI – Gold jewellery sector in China may experience some seasonal weakness in the coming months, which could intensify if prices of the commodity rise, according to Ray Jia, head of research (Asia Pacific, ex-India) and Deputy Head of Trade Engagement (China) at the World Gold Council. Investment demand for gold is expected to remain robust, potentially supported by ongoing geopolitical risks, globally and regionally, Jia said.
Gold prices diverged in February as the London Bullion Market Association price rose around 5% in dollars, supported by heightened geopolitical risks and lower US treasury yields, while prices on Shanghai Gold Exchange fell 1.3%, likely impacted by the 1.4% appreciation in the yuan against the dollar. The Chinese New Year holidays also disrupted both local trading and physical gold withdrawals, weighing on prices, Jia said. "So far in March, gold prices have experienced mild declines as investor expectations of the Fed's future rate path shift," he added.
Gold withdrawals from the Shanghai Gold Exchange totalled 85 tonnes in February, down 32% month-on-month, mainly due to fewer working days in February compared to January. It is noteworthy that most factories in China – including jewellery manufacturers and bullion refiners – usually take longer Chinese New Year holidays than other sectors, further weighing on February activity, he said.
Chinese gold exchange-traded funds added $640 million in February, the sixth consecutive month of inflows. Collective holdings rose 3.6 tonnes to 290 tonnes in the month, another all-time high, Jia said. However, the total assets under management fell 1% on month to $48 billion as inflows were insufficient to offset the local gold price drop. "Early-month volatility may have prompted some investors to reduce their holdings. As the local gold price stabilised investors added gold ETFs back into their portfolios," he said.
Inflows into gold ETFs have accelerated so far in March, despite volatility in prices, mainly because of rising safe-haven demand amid escalating global geopolitical tensions and a volatile equity market, Jia said.
The People's Bank of China reported addition of another 1 tonne to its gold holdings in February, taking the total to 2,309 tonnes. This represents 10% of foreign exchange reserves. "China's gold reserves have risen consecutively for 16 months, sending an important message: in today's world, gold's role as an effective portfolio diversifier and uncertainty cushion is highly relevant," Jia said. End
US$1 = INR 92.45
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Ashutosh Pati
Edited by Deepshikha Bhardwaj
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