Chinese women 'revenge spend' on gold jewelry

Yuan Luhang
China's gold market experiences a release of pent-up demand with sales of gold jewelry to women in the first quarter of 2021 reaching their highest level since 2015.
Yuan Luhang
Chinese women revenge spend on gold jewelry

A sales assistant show gold jewelry in the shape of a cow, signifying the Year of the Ox.

A “revenge spending" trend — the release of pent-up demand — has become a feature of the gold market with first-quarter sales of jewelry to Chinese women at their highest since 2015.

China’s gold jewelry consumption in the first quarter stood at 119.1 tons, the highest quarterly level in seven years, according to the World Gold Council’s latest survey released on Thursday.

“The booming jewelry demand was underpinned by three main drivers: the improving economic conditions, a slightly lower gold price and a sales spree related to holidays,” said Roland Wang, the World Gold Council’s managing director China.

“As usual the first quarter in China is a boom season for gold jewelry when the Spring Festival, the New Year’s Day, and the Valentine’s Day fall. But unusually this year, International Women’s Day became a sales peak of gold jewelry in China. This is the first time I have experienced such a surprise since I joined the council in 2015,” Wang said.

Gufajin, gold jewelry with elements of “China fashion” and with exquisite designs, is gaining in popularity with young people.

“Gufajin has two obvious features: it’s heavy and expensive. In the past, consumption of Gufajin mainly came from middle class women with high incomes. But this year, more young women began buying Gufajin,” Wang said.

Investing in gold also saw a strong performance in the first quarter with rapid growth in the demand for gold bars and coins. Another highlight was the gold exchange-traded fund (ETF), a type of gold-backed security product, which increased sharply by 11.5 tons against the global trend of outflow, with the total gold-backed ETF in China at a historic high of 72.4 tons.

“As the local stock market’s volatility rose and the local gold price fell, Chinese investors’ interest in gold-backed ETF rose significantly,” Wang said, "and we expect the gold demand in China to be well supported throughout the next three quarters.”

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