China, the world’s largest gold consumer, witnessed a sharp decline in gold demand in the third quarter of 2023, as high prices and a sluggish economy deterred purchases. Total demand for gold dropped by 22% to 218 tons from July to September, according to Bloomberg calculations based on data released by the China Gold Council on Monday.
Jewelry sales experienced the steepest decline, with consumption plummeting 29% to 130 tons. Demand for gold bars and coins also saw a reduction, falling 9% to 69 tons. This decrease coincides with a roughly one-third increase in gold prices this year, fueled by heightened central bank purchases and a surge in safe-haven demand among global investors.
Rising prices have made gold jewelry significantly more costly at a time when many Chinese consumers are dealing with an extended economic slowdown, impacting their purchasing power.
Throughout the first three quarters, total gold consumption in China dropped by 11% to 742 tons, as per the council’s data. In September alone, non-monetary gold imports were recorded at 97 tons, down 22% year-on-year, although showing an increase from August.
The combination of record-high gold prices and economic challenges has put pressure on China’s gold market, particularly in jewelry demand.