According to the latest statistics from the China Gold Association, in Q1, domestic gold production from raw materials reached 87.243 mt, up 1.284 mt YoY, representing a 1.49% YoY increase. This included 61.772 mt of gold produced from gold mines and 25.471 mt of gold produced as a by-product of non-ferrous metals. Additionally, in Q1, gold production from imported raw materials was 53.587 mt, up 0.68% YoY. Including this gold produced from imported raw materials, China's total gold production reached 140.83 mt, up 1.18% YoY.
In Q1, gold enterprises seized the opportunities brought about by rising gold prices, further reducing the cut-off grade to maximize the utilization of gold mine resources, leading to steady growth in gold production. Key gold mine projects, such as Haiyu, Shaling, and Xiling, advanced rapidly. Major gold enterprises actively adjusted their gold production layouts and promoted the construction of intelligent and green mines. China's large gold groups actively pursued an "outbound" strategy, accelerating the pace of gold M&A with remarkable results. On March 10, Chifeng Jilong Gold Mining Co., Ltd. was listed on the main board of the Hong Kong Stock Exchange, becoming the third domestic gold enterprise to be listed on both the "A+H" dual platforms, following Zijin Mining and Shandong Gold. In Q1, China's large gold groups produced 18.485 mt of gold from overseas mines, up 13.14% YoY.
In Q1, China's gold consumption reached 290.492 mt, down 5.96% YoY. This included 134.531 mt of gold jewelry, down 26.85% YoY; 138.018 mt of gold bars and coins, up 29.81% YoY; and 17.943 mt of gold for industrial and other uses, down 3.84% YoY.
Due to the suppression of high gold prices, consumer demand for gold jewelry remained weak, with traditional gold, high-purity gold, and small-weight gold jewelry being in higher demand. Products combining gold with other materials were also popular among young consumers. The complex and volatile geopolitical situation and economic uncertainties further highlighted gold's function as a safe-haven asset and a store of value, leading to a rapid and substantial increase in private investment demand for gold bars and coins. Industrial gold use showed a slight decline due to the impact of high gold prices.
In Q1, China's gold market trading volume and turnover showed significant growth trends. The total two-way trading volume of all gold varieties on the Shanghai Gold Exchange was 16,000 mt (8,000 mt one-way), up 4.57% YoY, with a two-way turnover of 10.7 trillion yuan (5.35 trillion yuan one-way), up 42.85% YoY. The total two-way trading volume of all gold varieties on the Shanghai Futures Exchange was 55,400 mt (27,700 mt one-way), up 91.17% YoY, with a two-way turnover of 30.52 trillion yuan (15.26 trillion yuan one-way), up 143.69% YoY.In Q1, the open interest of domestic gold ETFs increased by 23.47 mt, up 5.49 mt from Q1 2024, representing a 327.73% YoY increase. By the month-end of March, the holdings of domestic gold ETFs reached 138.21 mt.
On February 7, the National Administration of Financial Regulation issued the Notice on Conducting Pilot Programs for Insurance Funds to Invest in Gold Business, clarifying that insurance companies could conduct pilot programs for investing in gold business for the purpose of medium and long-term asset allocation. On March 25, the Beijing Branch of Industrial and Commercial Bank of China, in collaboration with China Life Insurance Company Limited, completed the nation's first insurance fund gold investment inquiry transaction under the new policy framework of the National Administration of Financial Regulation for conducting pilot programs for insurance funds to invest in gold business. This marked the first batch of gold transactions involving insurance funds entering the market. The investment channels for insurance funds were further broadened, injecting new vitality into the development of the gold market to a certain extent.
By the month-end of March, the London spot gold fixing price was US$3,115.1 per ounce, up 17.79% from US$2,644.60 per ounce at the beginning of the year. The average price in Q1 was US$2,859.62 per ounce, up 38.16% from US$2,069.80 per ounce in the same period of 2024. The closing price of Au9999 gold on the Shanghai Gold Exchange was 730.8 yuan per gram by the month-end of March, up 19.02% from the opening price of 614 yuan per gram at the beginning of the year. The weighted average price in Q1 was 670.67 yuan per gram, up 37.68% from 487.11 yuan per gram in Q1 2024.
In Q1, China increased its gold holdings by 12.75 mt. As of the month-end of March, China's gold reserves stood at 2,292.33 mt.
