China’s leading gold demand segment: resilient retail investment

China's Gold Retail Investment Trends

• Q2 2026 performance: Gold retail investment fell 7% y/y and 48% q/q to 107t, though it remained robust historically as the third highest Q2 since 2010 (p. 1).
  • Value terms: Driven by a 29% y/y increase in average local gold prices, retail investment in value terms reached a record high for Q2 (p. 1).
  • Quarterly dynamics: Investment was concentrated in April and early May, but weakened later due to lower confidence in gold prices and rising interest in domestic AI-related equities (p. 1).
• Full-year forecast: Following a 31% y/y increase in H1 2026, full-year gold retail investment is projected to rise 20% y/y to a record of over 500t (p. 5).
  • Key drivers: Demand is expected to be driven by gold's appeal as a safe haven, a constructive price outlook, the PBoC's gold reserve accumulation, and the shift from jewellery to bars (p. 5).

Impact of VAT Policy Changes

• Tax exemptions: Gold bars and coins sold by SGE-member companies remain exempt from VAT, whereas silver, platinum, and non-SGE gold products face a 13% VAT (p. 1).
• Shift in silver market: Non-SGE members initially shifted to silver bars in late 2025 and Q1 2026, but as silver prices weakened in Q2 2026, many suppliers exited and returned to gold products (p. 3).
• Jewellery to bar transition: Consumers face an effective ~7% VAT on gold jewellery, accelerating a shift to gold bars (p. 3).
  • Jewellery demand decline: Gold jewellery demand fell 28% y/y to 50t in Q2 2026, marking the lowest quarterly figure since 2010 and the third consecutive quarter where retail investment exceeded jewellery consumption (p. 3).

Retail Channels and Investment Products

• Non-bank outperformance: Bar sales through non-bank institutions (retailers, refineries) outperformed commercial banks in Q2 2026, aided by aggressive marketing and online live streaming promotions (p. 5).
• Gold Accumulation Plans (GAPs): Interest in bank-offered GAPs remained solid in Q2 2026, though net inflows slowed (p. 5).

Global Precious Metals Briefs

• Gold: Slipped below $4,400 after reaching a 10-week high (p. 1).
• Silver: Global semiconductor sales rose 124% y/y in June to $134bn (p. 1).
• Platinum: CME net managed money longs dropped to a four-month low of 17koz (p. 1).
• Palladium: Indian passenger vehicle sales rose 19% y/y in July to 417k units, with alternative fuel vehicles exceeding a 40% share (p. 1).