Q1 Gold Production in China Declines, Yet Physical Investment Demand 'Marches Forward'

According to the latest data released by the China Gold Association this Saturday, the Chinese gold market showed a clear supply and demand differentiation in the first quarter of 2026. Domestic gold production has declined due to the suspension of production at smelters in many places due to safety inspections and routine maintenance, but the demand for risk aversion on the investment side has driven a contratrend growth in physical gold consumption.

Reuters, citing official data, pointed out that the total gold produced in China from domestic and imported materials in the first quarter was 136.230 tons, a decrease of 3.3% compared to the same period last year. Among them, the domestic material gold decreased more significantly, with a year-on-year drop of 7.1% to 81.065 tons.

In sharp contrast to the缩量 on the production side, the total gold consumption during the same period reached 303.292 tons, a year-on-year increase of 4.4%. The drastic fluctuations in the consumption structure reflected changes in market sentiment, with physical investment demand represented by gold bars and coins soaring by 46.4%, reaching 202.062 tons.

Affected by gold price fluctuations and shifts in consumer preferences, the traditional gold jewelry market performed poorly. Gold jewelry consumption in the first quarter was only 84.62 tons, a significant year-on-year decline of 37.1%, indicating the inhibitory effect of high gold prices on retail jewelry demand.

The China Gold Association clearly stated in its statement that the demand for gold investment remains strong. Gold bars and coins have become the most favored investment products, and the significant growth in the sales of gold bars through bank channels reflects the investors' high regard for the appreciation function of physical assets.