World Gold Council: China and Gold

Author: Jon Clarke - Bullion & Economics Editor

Published: 20 Sep 2021

Last Updated: 1 Feb 2023


The latest report from the World Council (WGC) looks at China’s jewellery market and shows a positive outlook for the market’s future with increasing demand from the younger generation which could further be spurred by a greater transparency in retailer pricing.

China’s Gold Jewellery Market 2021

China’s strong economic recovery helped see in the highest first-half year (H1) for 6 years, bringing it closer to pre-pandemic levels after 2020’s H1 performance which was less than half of this years at around 152 tonnes, compared to 2021’s 338 tonnes.

Real disposable income grew 12% year-on-year, following the effective containment of the pandemic and several monetary and fiscal policies, which boosted consumer spending on items like gold jewellery. An 8% price fall in gold during the first quarter (Q1), further increasing demand.

According to the China Gold Association (CGA), approximately 70-80% of total gold jewellery sales is taken up by 24-carat gold products.

Gold Jewellery Retailers

One of the main findings of the WGC’s report is that gold products dominate the retail jewellery sector, taking up 52% of inventories in 2021, up from 45% in 2020. This is down to three recognised factors:

  • High liquidity
  • Easy product turnover
  • Historical status

The rising price of gold as the COVID pandemic took hold meant that China’s gold consumption fell sharply, while jewellers themselves were able to liquidate their gold products quickly and made attractive returns. After the realisation of holding gold as a store of value, jewellers began to increase their inventories.

“Heritage gold”, which often comes as 24-carat with ancient craftsmanship and traditional cultural themes has gathered considerable pace as has a much newer trend of “Guochao”, meaning “national trend”. Whereas Heritage gold is more popular among the middle-aged, Guochao has a much more youthful following.

A return to the “per gram pricing” model has also been seen as it is noticeably more transparent than the more commonly used “per piece-pricing”. Previously, retailers were often able to charge much higher premiums per piece. Consumers, however, became more wary as this gave no indication to the products’ composition. Per gram pricing on the other hand simply uses the spot price allowing for any mark ups for labour and other costs. This is considered a much fairer method for pricing.

Younger Consumers Expected to Drive Demand

According to the WGC, the younger generation are spending more on gold today than they were in 2019, before the COVID outbreak. A survey of those 25 and under, showed that one third of respondents spent more this year than in 2019 while 35% of those between the ages of 26-40 also spent more during 2021.

Many Chinese retailers have expressed confidence that young consumers will contribute to increasing sales in the future. In previous years, one of the key factors that hindered sales, particularly among young women was product styling. The surging popularity of Heritage gold and Guochao has helped overcome this barrier. Therefore an expanding product range could further improve sales.

77% of retailers surveyed are expecting to focus their business on private traffic using existing customers and also increasing their social media marketing.


The WGC’s report shows the importance of gold products in retailers’ inventories and how adapting to a new and younger market will help increase sales by focusing on a more digital style of marketing. As is often the case, a greater transparency in pricing will further help sales and not just among younger consumers.

Related Articles

Popular Products

This guide and its content is copyright of Chard (1964) Ltd - © Chard (1964) Ltd 2024. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited.

We are not financial advisers and we would always recommend that you consult with one prior to making any investment decision.

You can read more about copyright or our advice disclaimer on these links.