China overtakes India to become the world's largest gold jewelry consumer in 2023

China's consumption of gold jewelry overtook India to become the world's top gold jewelry consumer in 2023, becoming the main engine of growth globally as demand has recovered post-pandemic, a report released by the World Gold Council (WGC) showed on Wednesday.

In 2023, the world's total gold jewelry consumption stood at 2,092.6 tons. China's gold jewelry consumption rose by 10 percent year-on-year to reach 630 tons in 2023, while India's consumption declined by 6 percent on a yearly basis to reach 562.3 tons last year, according to WGC.

"Both China and India are major gold jewelry consumers, and the fact that China has overtaken India in this area underlies that Chinese consumers have strong demand for gold jewelry and that Chinese's consumption capacity continues to rise," Zhou Yinghao, a senior gold analyst at the Bank of Urumqi, told the Global Times on Thursday.

China's GDP grew 5.2 percent year-on-year to hit 126.06 trillion yuan ($17.7 trillion) in 2023. The stable economic recovery built a strong foundation for the growth of gold jewelry consumption, Zhou said.

"On the one hand, continuously rising gold price stimulated consumers' desire to buy more gold bars and gold jewelry, and on the other hand, the improvement in the craftsmanship and the more exquisite design of gold jewelry meet consumers' pursuit of beauty, which gives a further boost to the development of the gold jewelry market," he said.

Looking ahead to 2024, Zhou forecast that global demand for gold bars will continue to be robust. "Against the backdrop of increasingly complex geopolitical situation, sluggish global economy and major central banks' moves of increasing gold reserves, more investors are likely to shift to safe haven assets including gold. As a result, gold price may continue to rise this year," he said.

China's central bank has ramped up gold reserve for the 14th consecutive month, with holdings rising to 71.87 million ounces (2,037 tons) at the end of December, from 71.58 million ounces at the end of November.