China National Gold (SH:600916) Xin Lang Cai Jing·2025-10-15 10:28Overview of Q2 and H1 2025 - In Q2 2025, retail gold investment and consumption demand in China reached 245 tons, a 10% decrease quarter-on-quarter but a 28% increase year-on-year, marking the highest Q2 level since 2013 [1] - Total demand for the first half of 2025 reached 518 tons, reflecting a 5% year-on-year growth [1] - In monetary terms, retail gold investment and consumption demand in Q2 and H1 2025 hit record highs of 189 billion RMB and 372 billion RMB, respectively [1] Jewelry Demand - Jewelry consumption in Q2 fell to 69 tons, a 20% year-on-year decline and a significant 45% drop quarter-on-quarter, representing the weakest Q2 performance since 2007 [4] - The total jewelry demand for H1 2025 was 194 tons, down 28% year-on-year, influenced by a 24% increase in domestic gold prices that eroded consumer purchasing power [4] - Despite the decline in volume, the total expenditure on jewelry in H1 2025 remained stable at 137 billion RMB, matching the previous year's level and exceeding the ten-year average by 34% [4] Gold Bar and Coin Sales - Sales of gold bars and coins in Q2 surged by 44% year-on-year to 115 tons, driving H1 retail investment demand to 239 tons, a 26% increase year-on-year and the highest level in 12 years [1] Gold ETF Performance - The Chinese market saw its strongest quarterly performance for gold ETFs, with inflows of 46.4 billion RMB (approximately 6.5 billion USD) in Q2, leading to an increase of 61 tons in holdings [1] - The total assets under management (AUM) for gold ETFs in H1 2025 skyrocketed by 116% to 152.5 billion RMB (approximately 21.3 billion USD), with total holdings rising by 74% to 200 tons [1] Central Bank Gold Purchases - The People's Bank of China continued its gold purchases in H1 2025, accumulating 19 tons, including 6 tons in Q2, bringing the official gold reserves to 2,299 tons, which constitutes 6.7% of total foreign exchange reserves [2] Outlook for H2 2025 - Jewelry consumption may continue to face pressure from low consumer confidence and high gold prices, with ongoing industry consolidation potentially suppressing upstream demand [3] - However, seasonal improvements and potential monetary or fiscal policy support could provide some relief [3] - Gold investment demand is expected to remain strong due to persistent global geopolitical and economic risks, alongside domestic growth uncertainties, which may drive investor interest in gold bars and coins [3] - Expectations of interest rate cuts and continued gold purchases by the People's Bank of China could further boost interest among Chinese investors [3]