In July, China’s gold imports from Hong Kong surged to 25.659 tonnes, a notable increase from June’s 21.919 tonnes, according to recent government statistics. Overall, gold imports through Hong Kong rose by over 6%, reaching a total of 31.457 tonnes.
Despite this uptick in gold imports, the jewelry sector in China continues to face significant challenges, largely due to the unprecedentedly high gold prices in 2024.
Wang Lixin, CEO of the World Gold Council (China), highlighted the severity of the situation, stating, “The primary issue over the past two quarters has been the relentless climb of gold prices to record levels, with hardly any significant corrections.”
The China Gold Association (CGA) has reported a sharp 27% drop in gold jewelry purchases during the first half of 2024. This decline is attributed to a mix of geopolitical tensions and economic uncertainties, which have driven gold prices to unprecedented highs. In the first six months of this year, China’s total gold consumption fell by 5.6% year-over-year, amounting to 523.8 tonnes, with jewelry purchases contributing only 270 tonnes, according to CGA data.
Wang commented, “We have seen abrupt increases in gold prices before, but never have they remained at such elevated levels for so long. This has led to market conditions we did not foresee.”
In response to the soaring prices, Chinese consumers are adopting a cautious approach, postponing purchases to gauge future price trends. Those who continue buying gold are shifting from high-end jewelry to more cost-effective options such as gold bars and coins. Sales of gold bars and coins surged by 46% in the first half of 2024, totaling 213.6 tonnes.
Wang emphasized the need for innovation in the face of these market challenges. “Despite the high gold prices, there is always a demand for new and unique products,” he noted. “It is essential to adapt and create offerings that cater to the evolving tastes and needs of consumers, particularly as they seek to integrate jewelry into their expanding social lives.”
He added, “Young consumers are particularly eager to purchase gold, highlighting the importance of leveraging new technologies to meet their expectations.” Despite the difficulties faced by the domestic jewelry market, Wang’s insights suggest that with strategic innovation, the industry can still attract and engage buyers.
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