Core Insights - The surge in gold prices has led to increased investment demand, particularly in gold ETFs, while retail gold jewelry demand has significantly declined, indicating a shift in consumer behavior from jewelry to investment [2][12] - Major jewelry retailers, such as Chow Tai Fook and Chow Sang Sang, are experiencing a wave of store closures, particularly in lower-tier cities, as high gold prices deter consumers and impact sales [5][7] Retail Performance - Chow Tai Fook reported a net closure of 905 stores in 2025, reducing its total to 6,501, marking an end to years of expansion [5] - Chow Sang Sang also faced a decline, with 74 stores closed in the first half of 2025, including 62 from its main brand [5] - The closures are concentrated in franchise stores in lower-tier cities, while self-operated stores have seen slight growth [7] Consumer Behavior - High gold prices have led franchisees to adopt conservative inventory strategies, resulting in a reluctance to stock large amounts of gold due to financial risks associated with price fluctuations [9] - The rise of live e-commerce has diverted customers from physical stores, exacerbating the challenges faced by brick-and-mortar retailers [9] - Retail sales of gold jewelry have been negatively impacted, with consumers becoming more cautious and delaying purchases due to high prices [11][12] Market Dynamics - The World Gold Council noted a significant drop in gold jewelry demand in China, attributed to unprecedented price increases outpacing income growth, which has weakened consumer purchasing power [12] - Investors are drawn to gold for its potential appreciation, while consumers view it as a product, leading to decreased demand as prices rise [12]

Core Viewpoint - Global gold demand surged to a record high of $132 billion, with a year-on-year increase of 45%, reaching 1,249 tons in Q2 2025 [2][5]. Supply and Demand Summary - In Q2 2025, global gold supply increased by 3% year-on-year, with gold mine production estimated at 909 tons, marking a historical high [2]. - The total gold supply for Q2 2025 is projected at 1,248.8 tons, with gold mine production contributing 901.5 tons and recycled gold accounting for 347.2 tons [3]. Investment Demand - Gold ETF demand remained strong for two consecutive quarters, significantly contributing to overall demand growth in Q2 2025 [5]. - Investment in gold bars and coins reached its highest level since 2013 in the first half of 2025, driven by rising gold prices and the asset's safe-haven appeal [6]. Central Bank Activity - Central banks globally added a total of 166 tons to their official gold reserves in Q2 2025, although the pace of purchases has slowed [6]. Jewelry Demand - Jewelry demand showed a divergence, with tonnage declining in most regions, nearly reverting to levels seen during the 2020 pandemic, while the monetary value of jewelry consumption increased [6]. Gold Price Trends - The spot gold price has risen over 26% this year, reaching a historical high of $3,500 per ounce in April 2023 [8]. - As of July 31, the spot gold price was reported at $3,307.49 per ounce, reflecting a nearly 1% increase [9].