China’s long-standing love affair with gold is being tested as record-breaking prices squeeze consumers’ purchasing power. With gold surging more than 50% this year to trade above $4,000 an ounce, many Chinese buyers are finding it harder to afford jewellery or invest in bullion.
The rally has been driven by global economic uncertainty and geopolitical tensions, as well as China’s own domestic challenges — including a sluggish property market that has fuelled demand for gold as a safe-haven asset.
But the soaring price means gold now costs over 1,160 yuan ($162.93) per gram at many Chinese retailers, nearly double the 630 yuan seen in January, according to state media reports.
Yan Lixiaofeng, who operates wholesale dealer Shenzhen Shenhui Jewelry in Shuibei — China’s largest jewellery trading hub — told Reuters that transactions are down around 60% compared with an average year.
“Before, with 1,000 yuan, customers could buy about three grams of gold jewellery; now, that only buys one gram. The difference is huge,” Yan said.
At one of Shanghai’s largest gold markets, shop managers reported that while more people are still buying gold than selling, most are opting for trade-ins — exchanging older pieces for newer designs rather than making fresh purchases.
“As far as gold consumption is concerned, it’s still generally high, but the recent increase in price is quite significant,” said Wang Haichuan, a store employee. “Some are hesitant, but others believe prices will keep rising.”
Many Chinese buyers remain optimistic despite the high prices.
“I’m not a financial manager, but I think it will still increase a bit,” said customer Zeng Shuangshuang.
Another shopper, He Meihong, added: “I think there’s still some room for investment opportunities.”
With gold at record levels, China’s demand may be shifting from quantity to quality, as buyers focus more on long-term value and design — a trend that could reshape the world’s largest gold market.
