China’s gold industry faced a decline in domestic production in Q1 2026, while investment demand rose in parallel. According to the China Gold Association, total output (including processing of imported raw material) fell 3.27% to 136.23 tonnes.
The main hit came at the mines, where production plunged 7.08%. The contraction was caused by widespread safety inspections and forced shutdowns of operations. Against this backdrop, national market players sharply scaled up overseas activity — Chinese companies’ foreign production jumped by more than 30%.
Investment boom vs. jewelry crash
The structure of domestic demand has undergone a radical shift. While total demand rose 4.41% to 303.29 tonnes, high market prices triggered a collapse of 37.1% in the jewelry sector. Consumers largely abandoned jewelry purchases in favor of physical bars and coins, whose sales soared 46.4%.
Official reserves
The People’s Bank of China (PBOC) remained an active buyer, adding another 7.15 tonnes to reserves in Q1. By the end of March, the country’s official holdings reached 2,313.48 tonnes, securing China the fifth spot among the world’s largest official gold holders.
Analysts point to a growing imbalance: regulatory pressure is restricting domestic supply while market volatility is turning gold into the primary safe‑haven asset for both households and the state. The current dynamics are forcing China to rely increasingly on external supplies and foreign mining.
