Jewellery shops shut down as Chinese consumers switch focus to gold bars and coins

Thu Sep 10 2026

Most of the gold jewellery shops that once lined the main commercial street in Biyang, Henan province, have closed as gold prices hover at high but volatile levels and a decline in marriages dents demand.

“Gold jewellery used to be very popular in our small county,” said 25-year-old kindergarten teacher Yu Qian, who described herself as a frequent buyer of gold jewellery. “There used to be more than 20 gold shops operating here, but I’d estimate that over two-thirds of them have already closed down.”

Jewellery retailers across China have been closing stores as demand weakens.

In recent corporate disclosures, Chow Tai Seng reported a net reduction of 473 stores across the country, while Lao Feng Xiang said it had closed 342 outlets in third- and fourth-tier cities. China Gold cut 323 locations in the first half, and Chow Tai Fook logged a net loss of 258 mainland China stores in the second quarter of the year, primarily driven by franchise contraction.

Fred You, a Guangdong-based business development manager at a national jewellery brand targeting lower-tier markets, said small jewellery shops were now under heavy pressure.

Consumers were buying less gold by weight, while shop owners still had to carry inventory, pay rent and bear other operating costs, he said.

“The willingness to pay a high brand premium for decorative appeal has largely evaporated,” You said.

In a report released in July, the World Gold Council said Chinese gold jewellery demand had fallen 28 per cent year on year in the second quarter to its lowest level for that quarter since 2004, with elevated, volatile gold prices and cautious consumers weighing on demand.

In a consumer insight report released last year, it said declining marriages and births were exerting longer-term downward pressure on China’s gold jewellery market.

Over the past five years, gold prices have tracked upwards despite periods of sharp volatility. After climbing from around US$1,800 a troy ounce in 2021 to a record high of US$5,200 early this year, bullion dropped to US$4,170 before rebounding to its current level of around US$4,400.

Yu said she believed high gold prices had even dented people’s marriage plans.

“A lot of young people here are reluctant to get married now,” she said. “Gold jewellery and the bride price have both become heavy financial burdens for young couples getting married.”

China recorded 3.275 million marriage registrations in the first half of this year, down 7.46 per cent from the same period last year, according to the Ministry of Civil Affairs. Yu and others said economic headwinds, high living costs and employment uncertainty had led young people to delay or forgo marriage.

China’s gold market is now increasingly split between higher-margin jewellery and investment gold.

The World Gold Council said in July that consumers had adapted to the market by exhibiting preferences for lighter-weight jewellery, old-for-new exchanges and lower-premium investment products.

Data from the China Gold Association showed that jewellery demand plunged 33.88 per cent year on year to 132.1 tonnes in the first six months of this year, while demand for safe-haven gold bars and coins rose 28.42 per cent to 339.3 tonnes. Total gold consumption increased by 1.23 per cent.

For some middle-class investors, the caution extends beyond gold. Guangzhou-based gold investor Vicky Liu, a doctor, said sharp swings in the US dollar, US Treasuries, Chinese stocks, gold, commodities and property had made it harder to identify safe places to put money, with one gold investment she made earlier this year still mired in loss.

“Whatever you invest in can lose money now, so people are becoming much more cautious,” she said.

Source: https://www.scmp.com/