China's H1 Gold Output Plunges 14.6%, Bar and Coin Consumption Surges 28%

Thu Aug 06 2026

China's domestic raw gold production fell 14.62% year-on-year to 152.908 metric tons in the first half of 2026, according to the China Gold Association, as mine safety inspections forced production suspensions. However, overseas mine output by major Chinese groups jumped 21.43%. Total gold consumption edged up 1.23% to 511.412 tons, but the structure diverged sharply: jewelry demand plunged 33.88% to 132.133 tons, while bar and coin investment surged 28.42% to 339.336 tons. Trading volumes on both the Shanghai Gold Exchange and Shanghai Futures Exchange contracted, though turnover values rose amid gold's price retreat. Gold ETF inflows slowed significantly. The People's Bank of China continued buying for a 20th consecutive month, with reserves reaching 2,346.45 tons, ranking fifth globally.

High and volatile gold prices, combined with the implementation of new tax policies, are profoundly reshaping the supply and demand dynamics of China's gold market. According to the latest statistics released by the China Gold Association on August 6, China's gold output declined notably in the first half of 2026, while the consumption structure showed stark polarization: jewelry demand shrank dramatically, yet investment demand for gold bars and coins proved exceptionally robust.

Data shows that in the first half of 2026, China's domestic raw gold production reached 152.908 metric tons, a decrease of 26.175 tons compared to the same period last year, representing a year-on-year decline of 14.62%. Including 77.080 tons of gold produced from imported raw materials, the nation's total gold output amounted to 229.988 tons, down 9.01% year-on-year. In sharp contrast to the production decline, total gold consumption continued to grow. National gold consumption in the first half reached 511.412 tons, up 1.23% year-on-year. However, the consumption structure diverged violently: gold jewelry consumption was just 132.133 tons, plunging 33.88% year-on-year; gold bar and coin consumption soared to 339.336 tons, surging 28.42% year-on-year; industrial and other uses totaled 39.943 tons, edging down 2.90%.

The China Gold Association noted that major gold-producing provinces and regions carried out extensive mine safety inspections and special rectification campaigns during the first half, forcing some mines to suspend operations for self-inspections, which had a phased impact on domestic gold output. Meanwhile, overseas mine projects operated by large gold groups maintained stable operations with orderly capacity release. Zijin Mining (601899.SS)-owned Akyem gold mine in Ghana and the Zhaojin Mining's Ruiguoduo gold mine in Kazakhstan continued to deliver incremental output. Overseas producing mines of China Gold, Shandong Gold (600547.SS), Shandong Zhaojin (1818.HK), and other enterprises all maintained steady production growth. In the first half, large gold groups achieved combined overseas mine production of 48.098 tons, a significant year-on-year increase of 21.43%.

On the pricing front, gold prices have undergone a notable correction since the start of the year. As of end-June 2026, the London spot gold fix was $4,026.05 per ounce, down 8.22% from the beginning of the year. The Shanghai Gold Exchange Au9999 gold closing price was 879.03 yuan per gram, down 11.21% from the opening price of 990.00 yuan per gram at the start of the year.

This phased pullback in gold prices paradoxically stimulated investment demand. Gold investment demand was strong, with bars and coins becoming popular investment categories in the market. Sales of gold bars through bank distribution channels grew notably. However, elevated gold prices pushed up costs for industrial users, leading to a decline in industrial gold consumption.

The gold trading market exhibited a divergence characterized by "contracting volumes, expanding values." In the first half, the Shanghai Gold Exchange's cumulative trading volume for all gold products reached 16,100 tons on a single-side basis (32,100 tons bilateral), down 4.37% year-on-year; cumulative turnover reached 16.57 trillion yuan (approximately $2.46 trillion) single-side (33.14 trillion yuan bilateral), up 36.75% year-on-year. The Shanghai Futures Exchange's cumulative trading volume for all gold futures and options reached 58,500 tons single-side (117,100 tons bilateral), down 22.46% year-on-year; cumulative turnover reached 46.57 trillion yuan (approximately $6.90 trillion) single-side (93.15 trillion yuan bilateral), up 4.80% year-on-year.

Affected by weakening gold prices and other factors, the pace of inflows into China's gold ETFs slowed markedly. In the first half, domestic gold ETFs added 28.677 tons, a sharp decline of 66.17% compared to the same period last year. As of end-June, domestic gold ETF holdings stood at 276.529 tons.

Despite the gold price correction, the People's Bank of China (PBOC) continued to increase its gold holdings. China added 40.12 tons of gold to its reserves in the first half. As of end-June, China's gold reserves reached 2,346.45 tons, ranking fifth globally. From November 2024 through June 2026, China has increased its gold holdings for 20 consecutive months.

From the supply side, the decline in domestic raw gold production was partially offset by growth in gold produced from imported raw materials. In the first half, gold produced from imported raw materials totaled 77.080 tons, an increase of 3.402 tons or 4.62% year-on-year, partly compensating for the decline in domestic mine output.

The structural changes in the current gold market reflect a profound shift in consumer and investor behavior under the dual impact of high gold prices and policy adjustments. Gold jewelry, burdened by high premiums and elevated absolute prices, has seen suppressed consumption willingness, while gold bars and coins, as investment instruments directly linked to gold prices, have benefited from safe-haven and value-preservation demand, becoming the primary destination for capital inflows.

Source: https://finance.biggo.com/