JINAN/GUIYANG (ANN/THE CHINA DAILY) – Once losing popularity to diamonds and other gems, gold is now experiencing a resurgence in China, driven by the younger generation.
In 2023, China’s gold consumption surged to nearly 1,090 tonnes, marking an 8.78 per cent increase year-on-year.
Of this, gold jewellery consumption reached 706.48 tonnes, up 7.97 per cent, while gold bars and coins saw a 15.7 per cent increase to 299.6 tonnes.
The 25 to 34 age group has become the primary consumer segment, rising from 16 per cent to 59 per cent in 2023, with those under 25 expected to become significant buyers in the future.
This renewed interest can be attributed to factors such as the resurgence of the China Chic trend, where jewellers are creating fashionable gold pieces infused with traditional Chinese aesthetics, and the perception of gold as a sound investment due to its recent performance in the capital market.
Gold rush
Ahead of the Spring Festival holiday, gold shops in the country have seen a large flow of consumers, many of whom are young people.
Wang Yinghao and Zhao Wenxiu, a couple in their 20s, spent more than CNY7,000 (around USD1,000) buying their parents a gold necklace and bracelet from a gold shop in Jinan, capital of East China’s Shandong province.
“Today’s gold jewellery have delicate design styles. Our parents were very happy when I showed them the pictures,” said Zhao.
According to Xia Liuxia, head of the gold shop, pure gold necklaces, bracelets, rings and other items worth between CNY2,000 and CNY3,000 yuan are most popular among young consumers. The stylish and innovative designs is one of the major reasons that has caught their attention.
Besides the fashion identity, young Chinese consumers choose gold jewellery also for investment reasons.
Tang Gang, a 28-year-old young man from southwest China’s Guizhou province, got married to his girlfriend in May 2023. Prior to their wedding ceremony, he followed the traditional Chinese custom and bought his girlfriend a “gold trio set” consisting of a gold ring, bracelet, and necklace, instead of buying a diamond ring.
“In recent years, the price of gold continues to grow. A ‘gold trio set’ generally costs more than CNY30,000 yuan, but the relatively high price has not hindered consumers’ enthusiasm as gold can maintain value over the long term compared to diamonds,” said Xia.
China chic
China Chic features fancy designs mixed with elements from the traditional culture. In recent years, the China Chic phenomenon has been warmly embraced by the younger generation.
As a result, a growing number of Chinese gold jewellers are joining the trend and designing jewellery products bearing traditional Chinese cultural elements to satisfy young consumers’ aesthetics needs.
At the gold shop in Jinan, a lock-shaped gold pendant engraved with koi fish and lotus, two auspicious patterns in China, is one of the bestsellers and most popular gold jewellery items on Xiaohongshu, China’s leading lifestyle social platform, said Xia.
“The lock has an exquisite design and adopts an ancient engraving craftsmanship,” said Xia. “But the price is not high. Many young consumers come to look for it.”
The upgrading of ancient Chinese gold craftsmanship such as “gufa gold” and “hard gold” in recent years provides more possibilities for novel designs.
“We are actively engaged in exchanges and cooperation with universities, inheritors of intangible cultural heritages, and cultural and art institutions, to better explore the integration of traditional culture with innovation in gold jewellery designs and techniques, bringing vitality to the gold industry,” Ding Xiaokang, head of retail business of Shandong Gold Group.
In the not-too-distant past, gold symbolized the pass taste of older generations, but now it is a statement of Generation Z identity that represents both personal style and cultural loyalty, said Wang Zhongwu, professor of School of Philosophy and Social Development, Shandong University.
Safe haven
Chinese people, particularly the younger generation, are embracing gold, with fewer fluctuations and lower risks, as a safe-haven investment.
Data from the Shanghai Gold Exchange show that the price for gold that is 99.99 per cent pure or above closed at CNY479.59 per gram at the end of December 2023, up 16.69 per cent from the opening price at the beginning of 2023.
At an Agricultural Bank of China branch in Guizhou, a staff member was introducing the bank’s gold products to a female customer born in the 1990s.
According to Xiong Xiong, a wealth consultant of the bank, since 2021, the sales volume of gold products in the Guizhou branch has increased significantly, with sales of about CNY27.5 million in 2022 and about CNY62.9 million in 2023, more than doubling.
In order to cater to the gold consumption trend of young people, at the end of 2023, the bank launched small-gram-weighted gold products, making them accessible even to those with limited budgets.
“Judging from the current market performance, the price of gold is relatively stable and may continue to rise. Buying gold now is a better investment channel,” said Liu Lianghui, a customer at the gold shop in Jinan. Although he is only 23 years old and has just worked for more than a year, he already has a strong sense of financial management.
“There has been a structural shift in the consumption motivation for gold jewelry in recent years,” Ding said, adding that the younger generation has a strong concept of investment and financial management and they turn to gold for its value preserving and low risk attributes, which boosts gold’s popularity.
