2026 marks the year of the Fire Horse in the Chinese Lunar calendar, a rare 60-year alignment that brings the energy of fire and horse together. This period is traditionally considered synonymous with high energy and ambition. Can this symbolic time in China translate into a period of accelerated economic progress for the country? After years of uneven recovery, China’s growth outlook is arguably showing early signs of stabilisation, raising interest in consumer sentiments, savings behaviour, and demand for safe-haven assets such as gold.
Goldman Sachs research expects China’s economy to outperform consensus forecasts in 2026, supported by resilient exports and a diminishing drag from the property sector. The bank projects growth of 4.8% this year, marginally below last year’s 5% expansion but above the 4.5% median estimate. If that outlook holds, how would it impact gold and gold jewellery consumption in the world’s largest bullion market? Furthermore, how will the ongoing record rally in gold prices, and China’s recent Gold VAT reforms impact jewellery sales? Roland Wang, Regional CEO, World Gold Council in China, answers the pressing questions about China’s gold market forecasts for 2026 in an interview with Shilpa Dhamija.
In China, gold jewellery consumption was down by 25% while gold investment was up nearly 28% in 2025. Consumers prioritised investment over adornment. However, why hasn’t the popularity of 999-purity gold jewellery translated into higher jewellery sales?
This is mainly because the gold price has surged and consumers’ income growth couldn’t catch up, therefore with relatively fixed budgets, consumers can only choose lighter products, resulting in falling tonnage demand. However, in value terms, consumer spending on gold jewellery in China stayed elevated Q1~Q3, highlighting the fact that consumers’ interest in gold jewellery remains intact.
Surging gold prices usually attract investment for gold, particularly when global and regional geopolitical risk spikes are getting more frequent, property prices stay weak and the Peoples’ Bank of China (PBoC) kept announcing gold purchases, which encouraged retail investors.
What is your 2026 outlook for gold consumption in China?
In 2026, demand forecasts rely on a few assumptions. If the gold price stays strong or keeps surging, then we expect gold jewellery demand in tonnage terms to keep falling – but the decline may narrow compared to 2025. Meanwhile, the strong price momentum should continue to attract investment, particularly when global and regional geopolitical risks remain high.
That said, in China, if the economy thrives and households’ savings are directed into gold to store value, then we may see both gold sectors to rise. Or take 2013 as an example, bargain hunting, buying at dips could stimulate both sectors too. Please note that these are historical occurrences and assumptions.
What are the emerging trends that could drive demand for gold in China?
For gold jewellery, we found that hard-pure-gold products, with 24-karat purity and hardness comparable to 18-karat that allow more intricate designs, have been driving the sector’s growth. Exquisitely hand-crafted, chunky heritage gold jewellery carrying rich Chinese culture also attracts attention from high-end consumers.
Apart from the high investment function of gold, the demand may benefit through gold’s allotment in institutional insurance funds and G+ funds*. Starting with a pilot program in 2025, China’s financial regulators officially authorised large insurance funds to invest up to 1% of their assets in bullion, creating new demand.
Gold ETFs are physical gold investments, which reached 133 tonnes in 2025; holdings of Chinese-listed funds more than doubled during the year. And we expect the sector’s demand to keep growing amid the strong gold price performance.
How have the recent changes in VAT on gold in China impacted jewellery sales?
Starting November 1, 2025, China made changes to VAT applicable on gold withdrawals from the Shanghai Gold Exchange. SGE members who withdraw gold for non-investment purposes, such as jewellery making, can now only deduct their sales VAT by 6% of their costs, instead of 13% previously.
Simply put, the deductible tax for gold jewellery manufacturers, withdrawing gold from SGE for jewellery making, has been cut down from 13% to 6%. This VAT policy change will likely increase operating costs for jewellery makers, forcing them to either reduce profit margins or raise product prices. Consequently, buyers face higher prices for gold jewellery, which may dampen its demand as gold prices are already high.
For investors, the VAT treatment of SGE members who withdraw gold and re-sell it for investment purposes hasn’t changed; they are still subject to the current VAT charge (at 13%)
Members who buy and sell gold directly on the SGE remain VAT free. This could further drive consumers to buy more investment grade gold products. These VAT changes will be valid till the end of 2027.
*Footnote: G+ funds are government-guided funds with vast state-linked investment pools that are now incorporating gold to diversify away from US dollar assets and hedge against global economic uncertainty.