China reported a 5.94% increase in gold consumption in the first quarter of 2024 compared to the previous year, driven by heightened safe-haven demand, according to the country’s Gold Association. Total bullion consumption reached 308.905 metric tons during this period.
Notably, purchases of gold bars and coins surged by 26.77% in the January-March quarter, accounting for 34% of the overall consumption, totaling 106.323 tons. This rise underscores a robust interest in tangible assets amidst uncertain economic conditions.
The central bank of the world’s second-largest economy also continued its buying streak, marking its 17th consecutive month of gold acquisitions in March. By the end of March, China’s gold reserves had accumulated to 2,262.67 tons.
However, gold jewellery consumption experienced a 3% decline, representing 59.5% of the total at 183.922 tons. This drop reflects a cautious approach by some consumers due to rapidly increasing bullion prices, which saw the most-traded gold futures contract on the Shanghai Futures Exchange climb 10% from the start of the year to 531.3 yuan ($73.32) per gram as of March 29.
The soaring gold prices have also introduced heightened operational risks for bullion processing and sales enterprises, as stated by the Association. Despite these challenges, China’s domestic gold output from locally sourced raw materials edged up by 1.16% to 85.959 tons, indicating a slight increase in production capability. 
