Every reporter Zhang Hong, every editor Ma Ziqing

April 26thCmfreecoinsandspinsThe China Gold Association released industry data for the first quarter of 2024. The China Gold Association says the impact of high gold prices on gold consumption is polarized. Consumption of gold bars and coins with relatively low premiums rose sharply, but consumers' wait-and-see mood for gold jewelry increased. Gold jewelry retailers are under pressure, gold processing and sales enterprises increase the risk of production and operation.

In the first quarter of 2024, the output of raw material gold in China was 85.Cmfreecoinsandspins.959 tons, an increase of 0% compared with the same period in 2023Cmfreecoinsandspins.987 tons, an increase of 1.16 percent over the same period last year, of which 60.191 tons of gold mineral gold and 25.768 tons of non-ferrous by-product gold were completed.

The consumption of gold jewelry is not as expected.

At the macro level, the world's major economies continue to implement loose monetary policy, US economic data are lower than expected, geopolitical conflicts escalate and central banks continue to increase their gold holdings. Under the superposition of many factors, the price of gold has risen strongly recently, breaking record highs repeatedly.

In the first quarter, China's gold production increased by 1.16% over the same period last year, and gold consumption increased by 5.94% compared with the same period last year. However, the impact of high gold price on gold consumption is polarized.

Specifically, gold bars and coins were 106.323 tons, an increase of 26.77 percent over the same period last year.CmfreecoinsandspinsThe consumption of gold jewelry was 183.922 tons, down 3.00% from the same period last year, and the sales pressure of gold jewelry retailers increased.

Talking about the reasons for differentiation, the China Gold Association said that the rapidly rising gold price, superimposed gold jewelry processing fees and high brand premium and other factors have increased consumer wait-and-see mood, gold jewelry consumption has been curbed to a certain extent.

In addition, high gold prices and huge fluctuations increase the production and operation risks of gold processing and sales enterprises, wholesale and retail enterprises become cautious about purchasing goods, jewelry processing enterprises have higher raw material costs and lower shipments, and some small and medium-sized processing enterprises even stop work and have a holiday. By contrast, physical gold investment has received more attention due to the surge in safe-haven demand, and consumption of gold bars and coins with relatively low premiums has risen sharply.

Gold production increased by more than 1% in the first quarter

In the investment market, the cumulative bilateral turnover of all gold varieties on the Shanghai Gold Exchange in the first quarter was 15300 tons (unilateral 7600 tons), an increase of 32.29 percent over the same period last year; the cumulative turnover of all gold varieties on the Shanghai Futures Exchange was 29000 tons, an increase of 14.89 percent over the same period last year; and domestic gold ETF holdings rose to 66.96 tons, up 5.49 tons from 61.47 tons at the end of 2023 and 8.93 percent over the same period last year.

On the supply side, China's gold output in the first quarter was 85.959 tons, an increase of 1.16 percent over the same period last year. Smelting enterprises increased the procurement of imported gold raw materials, and the gold output of imported raw materials increased significantly by 78.00% to 53.225 tons.

It is worth noting that according to the staff of the China Gold Association, while gold prices are rising rapidly and production and operating costs remain relatively stable, gold mining enterprises are more willing to carry out geological exploration and infrastructure technological transformation. At the same time, due to the increase in profit space of gold mining enterprises, relatively low-grade gold deposits that could not be selected because of high mining costs in the past may also be selected, resulting in a further increase in gold production.