This article first appeared in the JNA March/April 2025 issue.

China’s precious-metal jewellery market endured a challenging 2024 due to weak consumer confidence amid surging gold prices and economic headwinds. Industry players anticipate that the situation will persist in 2025, albeit with some improvement in the gold and platinum jewellery sectors buoyed by design innovations and the metals’ strategic investment appeal. The silver sector, however, will continue to grapple with a slowdown in demand.

Platinum resurgence

Gold prices reaching unprecedented levels – up 26.5 per cent as of end-2024 – reignited enthusiasm for platinum jewellery as price-sensitive consumers seek more affordable luxury alternatives, revealed data from the latest Platinum Quarterly report of the World Platinum Investment Council (WPIC).

According to the Q3 2024 research, platinum jewellery demand will continue to move beyond the trough of 2023, with a second consecutive year of growth forecast for 2025, driven by a surge in US and Indian jewellery fabrication.

Meanwhile, China, a key market for platinum group metals, experienced a significant downturn over the last decade, with demand plunging 79 per cent in 2023 from a peak of around 2 million troy ounces in 2014. The slowdown persisted in 2024 due to weak consumer spending amid domestic economic uncertainties.

However, some level of recovery is expected in 2025, led by major retailers replenishing stock and product innovations that appeal to a diverse demographic, including menswear and unisex designs, according to the report.

“To stimulate demand, it is crucial that we push the boundaries of product innovation to ensure our offerings resonate with the needs of consumers. Given that platinum jewellery is behind other categories in terms of product variety and designs, it is imperative for business to ramp up investment in product development,” said Zheng Feng, deputy general manager of China National Arts & Crafts (Group) Corp, at the China Platinum Group Metal Annual Conference held in Shenzhen on December 9, 2024.

Platinum jewellery is also viewed as an imported commodity in China, thereby underscoring the need to “localise” platinum jewellery to fuel growth. This means companies must resort to “hyper-localised storytelling.”

“To captivate Chinese consumers, we need to delve into and establish the cultural resonance of platinum, blending the essence of platinum with traditional Chinese culture while staying attuned to the nuances of modern society,” Zheng explained.

While demand for jewellery is weak, WPIC reported growing investment in platinum bars and coins in China, with a 17 per cent increase in demand for larger bars (500g and above) in 2024 compared to 2023.

The upcoming launch of platinum and palladium futures contracts by the Guangzhou Futures Exchange (GFEX) this year is expected to further boost platinum demand in industrial, jewellery, automotive and investment applications in China as they allow platinum users to manage lower price risks, said WPIC CEO Trevor Raymond.

Resilient gold

Despite positive signals in investment demand, the Chinese gold jewellery market experienced a notable decline in demand as consumers prioritised investments over luxury purchases.

Data from the China Gold Association (CGA) showed China’s gold jewellery consumption reached 532.02 tonnes in 2024, marking a 24.69 per cent year-on-year decrease. In contrast, bar and coin investments rose 24.54 per cent to 373.13 tonnes.

“Amid weak overall gold jewellery consumption and lower inventory turnover in 2024, gold jewellery enterprises managed to adjust their production and business strategies. They came up with innovative products or conceptual gold jewellery such as heritage gold and ‘Guochao’-style pieces,” CGA remarked.

The World Gold Council (WGC) observed the same trend, noting that high gold prices had a “double-edged sword” effect on China’s gold consumption in 2024.

“Strong gold prices alongside slow economic growth dented affordability for gold jewellery consumers, but when combined with declining yields, a volatile equity market and a weaker local currency, it attracted gold investors,” the council stated.

During the China International Gold Market Annual Conference in Shenzhen on December 10, 2024, WGC's CEO David Tait highlighted the emergence of hard pure gold jewellery as a standout in China's gold jewellery sector in 2024, thanks to its modern designs and affordability appealing to younger generations.

“The new industry standard for hard pure gold jewellery has been announced by the Ministry of Industry and Information Technology of China for formal execution from May 1, 2025. This will help the industry stay on a sustainable growth path and attract more and younger consumers with contemporary aesthetics and designs,” Tait commented.

The gold jewellery sector will rely on innovative ideas and advancement to drive growth, he added.

Joseph Cavatoni, senior market strategist of WGC, North America, pointed out that the US monetary policy and its role in the geopolitical landscape will be crucial factors influencing the gold market in 2025.

“Political and administrative policies from the US are going to take the front seat again and probably be the biggest driving force behind global consumer behaviour around gold,” noted Cavatoni.

Meanwhile, Joni Teves, precious metal strategist of UBS, said strategic diversification and safe-haven flows, buying from central banks and the relative strength of physical demand even at higher prices have all contributed to gold's resilient prices. Teves also anticipated a sustained gold rally leading to new record highs in 2025, with an average forecast of US$2,800 per ounce and a year-end target of US$2,900 per ounce.

“We do not think gold is expensive. Despite how expensive it is to buy gold jewellery right now, we have seen through history that consumers do eventually acclimatise to higher prices,” said Teves.

Sluggish silver

Chinese demand for silver jewellery is expected to weaken in 2025 as consumers tighten their belts on non-essential items, according to an analysis by the Silver Institute with contribution from Metals Focus, a global precious metals research consultancy.

Silver jewellery sales in Western markets, however, will likely remain sturdy, thanks to a price-led shift away from karat gold jewellery and steady performance of branded silver jewellery.

“Demand for silver jewellery in China has been declining over the last decade,” Simon Yau, senior consultant of Metals Focus, told JNA. “As Chinese consumers' purchasing power increased, they naturally moved away from silver jewellery and gravitated towards gold.”

In addition, the growing emphasis on wealth preservation among Chinese consumers led them to favour gold jewellery over silver as the latter lacks comparable resale value.

Yau noted that many silver jewellery companies target younger consumer segments through online platforms. “These consumers tend to see silver jewellery as a fashion accessory. Their purchases are driven by appealing designs and affordable prices for daily wear. They do not focus much on the quality of the metal itself,” he said.

Unlike in the gold or platinum jewellery sectors, macroeconomic and geopolitical issues have relatively less impact on silver jewellery demand in China. Investment in silver is likewise subdued.

It seems there is no silver bullet to help revitalise silver jewellery demand in a challenging market, but focusing on innovative designs remains crucial for businesses, Yau noted. Despite lacklustre domestic demand, Chinese silver jewellery manufacturers now primarily export products to the US and Europe. They are also exploring opportunities in rural and urban areas, third- and fourth-tier cities, as well as online sales channels.