Chinese gold jewellery makers are expanding sales into Middle Eastern and Indian markets as volatile bullion prices depress retail appetite in their domestic market. The shift follows a divergence inside China, where retail shoppers have pulled back from ornaments while purchasing bullion products for financial protection.
Domestic retail slump
Data from the China Gold Association shows jewellery consumption across the country fell 34 percent year-on-year during the first half of the year to 132 tonnes. Jewellery demand fell sharply.
Investment buying moved in the other direction over the same period, according to figures from the China Gold Association. Purchases of gold bars and coins climbed 28 percent year-on-year to 339 tonnes in the first six months, demonstrating consumer preference for pure asset holdings over decorative items.
Global demand shifts
The domestic slump allowed India to overtake China in the second quarter as the leading global consumer of gold ornaments. India accounted for 27 percent of global gold jewellery demand during the April-June quarter.
Manufacturers gathered at the Jewellery & Gem World Hong Kong event noted that export channels offer vital relief. Yuehao Jewellery, established in 1926, is among the historic producers targeting foreign buyers.
Wang Lixin, China CEO at the World Gold Council, said domestic processing capabilities have been transformed over the past 5 years. Foreign clients who once sought low-cost fabrication now look to Chinese suppliers for advanced manufacturing techniques and design value, Wang said.
Source: China Gold Association
