BEIJING (Commodity Online): Even as the world’s biggest consumer of India is shying away from buying gold jewellery, China is emerging as the world leader in yellow metal market.

According to a recent report, demand for gold jewellery in China grew in the second quarter, driven mainly by the country’s better-than-expected economic growth.

The demand rose 4 per cent annually to 78.7 tonnes in the second quarter in China.

There was an even stronger year-on-year growth in demand on the Chinese mainland of 6 per cent, which boosted its appetite for gold jewellery to 72.5 tonnes in the period, it said.

China’s mainland proved to be the most resilient among global jewellery markets, said the WGC.


The mainland stands out in comparison to the 26 per cent decline recorded across the rest of the world. The relative stability of the yuan and China’s economic growth have been instrumental in propping up jewelry demand.

A surge in bank lending has helped cushion the impact from the global credit crunch, while an aggressive stimulus package has underpinned the domestic economy.

China’s economy grew 7.1 per cent in the first half, with a better-than-expected growth of 7.9 per cent in the second quarter.

The 24-carat gold market is the most resilient while demand for 18-carat jewelry has eased.

The lackluster 18-carat gold jewellery market may be due to a shift in consumer preferences toward platinum, which has benefited from a price fall of about 40 per cent at the retail level this year.

The retail gold investment rose 47 per cent on the Chinese mainland to 17.1 tonnes in the second quarter.