Investing.com -- China’s domestic gold production saw a decline in the first quarter of 2026, even as consumer demand for the precious metal shifted toward physical investment amid price volatility, according to a report from Bloomberg citing data from the China Gold Association.
Total gold output, encompassing both domestic and imported raw materials, fell 3.27% compared to the previous year, totaling 136.23 tons.
The decline in domestic supply was driven primarily by a 7.08% drop in mine output, which was hindered by a series of safety inspections and temporary production suspensions across the country.
In contrast to the domestic slump, major Chinese gold producers reported a significant expansion in their international operations, with overseas production surging by more than 30% during the quarter.
On the consumption side, total gold demand in China rose by 4.41% year-on-year to reach 303.29 tons. However, the composition of this demand changed drastically due to high and unstable price levels.
Investment-grade gold, specifically bars and coins, saw a massive jump of 46.4% in purchases. The surge in investment came at the expense of the jewelry sector, where consumption plummeted by 37.1% as buyers pulled back in the face of record-high gold valuations.
Furthermore, the People’s Bank of China continued to bolster its national reserves, adding 7.15 tons of gold during the first quarter.
The PBoC’s addition brought the country’s total official gold holdings to 2,313.48 tons by the end of March, elevating China to the position of the world’s fifth-largest holder of gold reserves.
The data highlights a growing divergence between the tightening of domestic mining operations and the accelerating appetite for gold as a strategic financial asset.