Metals Focus: Strong Start for 2024 China National Gold Group Gold Jewellery Demand.

Metals Focus stated that during the survey in early January of this year, major jewelry retailers actively participated in various trade shows, and foot traffic at the Shenzhen Jewelry Showroom also significantly increased. Feedback from Shenzhen jewelry manufacturers showed that their business volume began to accelerate from the end of December 2023, and this growth momentum continued into January of this year. Consumer confidence in the strength of gold prices is increasing, coupled with strong seasonal demand before the Spring Festival, which has boosted sales of Chinese gold jewelry and gold bars. Additionally, the preference for the auspicious image of the Year of the Dragon further boosted gold demand. According to Metals Focus' research data, in the fourth quarter of 2023, China National Gold Group Gold Jewellery's jewelry consumption increased by 17% year-on-year to 148 tons, with an annual increase in gold jewelry demand of 10%. Given the impact of the spread of the COVID-19 epidemic on demand in the fourth quarter of 2022, resulting in a low base, the significant year-on-year increase in demand in the fourth quarter of 2023 is not surprising. However, many jewelry retailers and manufacturers have expressed that the recovery in demand is weaker than expected, with a key reason being the poor sales of gold jewelry during the Mid-Autumn Festival and National Day holidays (September 29 to October 6, 2023). At that time, consumer confidence was dampened by competition from tourism and entertainment spending, high domestic gold prices, and consumer concerns about a price correction, among other factors that suppressed demand. Metals Focus pointed out that despite some pressure, overall, the performance of China's gold jewelry demand in the fourth quarter of 2023 was good. In terms of metal weight, gold jewelry consumption in the fourth quarter of 2023 was 7% lower than in the same period in 2019 before the pandemic; however, when converting the total gram weight into RMB consumption amount (simply using the average gold price from the Shanghai Gold Exchange, without taking into account retail mark-ups, labor costs, and taxes), the consumption amount in the fourth quarter of 2023 was actually nearly 30% higher than in the same period of 2019. Using a similar calculation method, the RMB-denominated consumption amount for gold jewelry in 2023 has reached a historical high. The trend of strong consumption is expected to continue into 2024, especially during the long Spring Festival holiday period (February 10-17), when sales of gold jewelry are expected to be strong.