Gold prices have remained high in recent years, but the “gold rush” among Chinese consumers shows no signs of abating. In fact, the penchant for gold is trending towards the young, with gold jewellery becoming a popular commodity, given gold’s ability to hold its value.
Academics interviewed feel this reflects the increasing uncertainty of young people about their economic prospects, leading to more practical and cautious consumption habits.
Gold as a hard currency has always been one of the most stable safe haven assets. Driven by factors such as the pandemic, the war in Ukraine, the economic recession, and intensified inflation, the price of gold has steadily risen over the past three years, cracking US$2,000 per ounce more than once this year.
However, the high price of gold has not deterred Chinese consumers from buying it. According to statistics from the China Gold Association, gold consumption in the first quarter of this year hit 291 tonnes, a 12.03% increase compared to the same period in 2022, more than half of the total consumption in the previous year.
...those aged 25 to 35 years accounted for 75% of consumers in gold shops.
The dominant consumer group in the Chinese gold market has quietly shifted in recent years, transitioning from middle-aged women to young people. According to data from the World Gold Council in 2021, those aged 25 to 35 years accounted for 75% of consumers in gold shops. The China Gold Association forecasts that Gen Z consumers aged below 25 will become the main force in gold consumption in the future.
Shuibei’s gold shops bustling
When this reporter visited Shuibei, China’s largest wholesale jewellery market on 15 June, even on a workday, the gold shops in major commercial centres were bustling with customers, nearly half of whom were young people. Shuibei hosts the largest number of gold and jewellery enterprises in China, and is considered the “barometer” of the gold consumption market.
Lin Huamei, a 20-year-old college student, started buying gold earrings and necklaces last year. In an interview with Lianhe Zaobao, she said more of her friends were wearing gold jewellery lately, so she decided to buy some for herself.
She said: “Once I purchase gold jewellery, I run out of money for reckless spending. Gold also retains its value, so while spending, I am also making an investment. Wearing it also feels nice and secure.”
Industry insiders believe that gold craftsmanship has become more exquisite in recent years, and jewellery designs cater to the aesthetic preferences of young consumers. Furthermore, the jewellery industry’s expansion into e-commerce platforms and live streaming rooms has boosted the promotion of gold jewellery in online spaces, attracting more young people to buy it.
These advancements have greatly improved the hardness, colour, and feel of gold jewellery, resulting in a greater variety of styles and greater dimensionality.
Gold craftsmanship updated: jewellery and beads
Qiu Xiaoshuang, who runs a gold shop at Jinzhan Jewellery Square in Shuibei, said gold jewellery used to be considered old-fashioned. However, in the past couple of years, gold craftsmanship has advanced significantly with techniques and casting processes producing “5G” gold, ancient and hard gold. These advancements have greatly improved the hardness, colour, and feel of gold jewellery, resulting in a greater variety of styles and greater dimensionality. She said: “Young people like these styles, and they have become fashionable accessories that they wear every day.”
Besides gold jewellery, in recent years young people in China have also embraced the trend of collecting “gold beads” (金豆豆), buying approximately one gram of gold at intervals as a form of savings, like coins.
Gold shop owner Cai Xiaodong said young people have limited purchasing power, and the weight of gold jewellery they buy is generally less than five grams. Gold beads, on the other hand, lower the threshold for buying gold, giving everyone the chance to own gold.
"Instead of embracing risky real estate or stock investments, where they may be taken for a ride, young people believe that gold with its shine and weight is a better investment choice that retains its value.” — Wang Yanbo, Associate Professor of Strategy and Innovation, University of Hong Kong Business School
Wang Yanbo, Associate Professor of Strategy and Innovation at the University of Hong Kong Business School, said young people’s consumption of gold is a projection of their uncertainty about the economy in the foreseeable future — their consumption mindset has become more practical and cautious, and they focus more on the actual value of items rather than the spillover effects of branding.
He said: “Instead of embracing risky real estate or stock investments, where they may be taken for a ride, young people believe that gold with its shine and weight is a better investment choice that retains its value.”
As for buying gold beads as a means of saving money, Prof Wang feels the fun factor meets the psychological needs of young people, and buying gold beads has a low consumption threshold. However, due to the extremely small weight of gold beads and the difficulty in monitoring purity and colour, the unit cost is high, and there is a significant premium, so it is “not a particularly good investment option”.
This article was first published in Lianhe Zaobao as "中国年轻人掀“淘金潮” 学者：反映消费观更谨慎".
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