China emerged as the world’s largest buyer of gold jewelry in 2023, surpassing India, with a remarkable 10% surge in demand to 630 tons, even in the face of elevated gold prices. This shift was revealed in the Gold Demand Trends report by the World Gold Council, citing a global increase in gold jewelry demand by three tons to reach 2,093 tons.
Despite gold reaching a record price of USD 2,078.40 per ounce last year, attributed to geopolitical conflicts and US interest rate hikes, China experienced a 17% spike in gold prices, leading to a substantial CNY 282 billion (USD 39.4 billion) surge in consumer spending on gold jewelry.
The surge in demand was attributed to China’s robust economic recovery, the enduring allure of gold, and an uptick in demand for jewelry, particularly in wedding-related purchases, according to Wang Lixin, CEO of the World Gold Council’s local branch.
However, concerns are raised about potential weakening consumer demand in the coming year due to escalating gold prices and other contributing factors, as pointed out by Wang Lixin.
Globally, overall demand, including over-the-counter trading and other sources, reached a record-breaking 4,899 tons in 2023, according to the report. Central bank buying, albeit slightly reduced from the 2022 record, maintained a brisk pace at 1,037 tons. The People’s Bank of China increased its reserves by 224.88 tons to a total of 2,235.41 tons, marking the 14th consecutive monthly rise in holdings as of December.
The report further highlighted a 3% decline in global demand for gold bars and coins in 2023. However, China bucked this trend, experiencing a significant 28% surge to 280 tons, offsetting a substantial 59% decline in Europe. Notable increases were also observed in India, Türkiye, and the United States, with rises of 185, 160, and 113 tons, respectively.
Louise Street, senior market analyst at the World Gold Council, emphasized the continued influence of global monetary policies and geopolitical uncertainties on gold prices, anticipating these factors to shape the market throughout the upcoming year.
