China's Gold Jewellery Buyers Spend More for Less Metal
China's jewellery spending rose while gold tonnage weakened. The WGC's retailer report shows why lighter products could limit a physical demand recovery.
by Corinne Ashdown3 min read
China's consumers spent more on gold jewellery in the first half of 2026 while buying less metal, according to the World Gold Council's October 16 retailer report. Consumption totalled 136 tonnes, the weakest first half since 2006, even as spending rose from a year earlier toward its record high. For your bullion position, higher jewellery receipts therefore give us limited evidence of a recovery in physical demand.
Investment demand reached 342 tonnes over the same half, counting bars, coins and ETFs. The Council attributes this demand split to the economy: low confidence and expensive gold squeeze discretionary purchases, while lower domestic interest rates and a subdued property market encourage investment buying. It also names the additional VAT burden introduced late last year. Its November 2025 tax analysis describes higher costs for non-investment gold in the supply chain. We would keep these spending decisions separate when assessing how much Chinese demand can support bullion.
Can the jewellery business recover without buying much more gold? The survey finds that most retailers plan to expand lighter products with higher margins. Shops remain confident in gold relative to other jewellery categories, and most regard the current weakness as temporary. Those are retailers' views and plans, rather than measured future sales. Lighter pieces could help customers stay within a budget and support a shop's profitability while limiting the gold needed for each sale. We would look for recovery in tonnes alongside recovery in revenue.
This is a different demand channel from the reserve additions in China Adds 23 Tonnes to Gold Reserves. Central-bank purchases are separate from the bars, coins and ETFs counted in today's investment figure. The Council's October 15 market update says jewellery weakness weighed on third-quarter demand, although holiday buying improved as prices pulled back. It expects a seasonal fourth-quarter boost, with affordability and low confidence still weighing on tonnage. That gives us a reason to watch the holiday recovery without treating the first-half figures as a full-year forecast.
If you hold bullion through SPDR Gold Shares, ticker GLD, State Street describes its objective as reflecting the gold bullion price after expenses. Strong investment demand can support that exposure, while jewellery's weak tonnage leaves less support from discretionary buyers. If investment buying eases before jewellery volumes recover, your holding would lose support from the stronger channel while the weaker one is still struggling. You still face losses if bullion prices fall, and fund expenses reduce returns.
By November 6, we will check for the Council's next demand release and whether stronger jewellery sales are absorbing more physical gold.
Seek the truth and be prepared,
Equedia News
Sources
- World Gold Council, 2026 Chinese jewellery retailer insights: Confidence check, October 16, 2026
- World Gold Council, You asked, we answered: What are the implications of the VAT reform in China?, November 7, 2025
- Equedia News, China Adds 23 Tonnes to Gold Reserves, October 15, 2026
- World Gold Council, China gold market update: Q3 ends with strong official gold buying, October 15, 2026
- State Street, SPDR Gold Shares product page, accessed October 16, 2026
Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. Past predictions and performance are not indicative of future results. We own gold and gold stocks. Please see our full terms of use and disclaimer at equedia.com.
