In the year of 2025, the upward trend of gold prices continued from 2024, with an accumulated increase of nearly 30%. However, the consumption of gold jewelry in China has decreased by almost 30%, leading to a crisis in jewelry stores. Many jewelry store owners have expressed that it’s difficult to make a profit in the gold jewelry business, forcing them to close their shops to limit losses. Major jewelry brands like Chow Tai Fook, Luk Fook, and Lao Feng Xiang have been actively closing stores. Industry insiders believe that with the economic downturn, consumers are becoming more discerning, and the wave of jewelry store closures is expected to continue.
According to a report titled “China Gold Market Review and Trend Analysis for the Second Quarter of 2025” released by the World Gold Council, the total gold jewelry consumption demand in China for the first half of the year has dropped to 194 tons, a 28% decrease compared to the previous year. The foreign exchange portal website, Fxstreet, noted that this is the lowest level since 2009, excluding the impact of the COVID-19 pandemic in 2020.
A blogger named “Hua Jie’s Pawnshop” recently shared a video lamenting the challenges faced in their prime location, struggling to sustain business. They described a significant decline in the frequency of stocking gold items and mentioned a shift in consumer behavior towards more conservative purchasing habits due to the high gold prices.
Even though the demand for gold jewelry has declined, gold prices have continued to surge. On August 5th, COMEX gold futures rose by 0.85%, reaching $3428.6 per ounce. Since the beginning of the year, international gold prices have steadily climbed, surpassing $3000 per ounce in March and even reaching over $3500 per ounce in April, setting new historical records. As of the closing on August 1st, London gold and COMEX gold have experienced year-to-date increases of 28.14% and 29.34%, respectively.
During a visit to Beijing’s Tianya Jewelry City, reporters from “Securities China” found that some industry practitioners expressed concerns about the high gold prices leading to reduced consumer interest in gold jewelry, leaving some store owners with overwhelming business pressures, ultimately forcing them to close.
Reflecting on the situation, blogger “Hangzhou Yunning Gold” shared their disappointment in having to close off sections of their store after investing millions in renovations a few years ago. They lamented the contrast between their initial enthusiasm for the jewelry business and the current struggle to sustain operations.
Even well-established jewelry stores are facing financial challenges amid the market downturn. Renowned blogger “Lin Qingfeng (Aberli Jewelry)” with 26 years of experience in the industry mentioned in a video that few of his colleagues have reported profitable business ventures in the first half of the year. This trend of struggling businesses within the jewelry industry is widespread, with many businesses finding it hard to stay afloat.
Looking at the performance of several publicly listed gold sales brands, it further reflects the challenging circumstances. According to the operational data released by Chow Tai Fook, their revenue for the 2025 fiscal year dropped by 16.8%, leading to the closure of 896 stores in mainland China. Similarly, Luk Fook’s prospectus indicated a reduction in the number of franchise stores in China, while Lao Feng Xiang closed down a significant number of franchise stores with minimal increase in direct-operated stores.
On July 31st, Jia Shuchang, the head of the China division of the World Gold Council Research Department, highlighted in a media communication session that the sluggish demand for gold jewelry has resulted in a further reduction of retail points for gold jewelry retailers, ultimately affecting the upstream physical gold demand.
Blogger “Lin Qingfeng (Aberli Jewelry)”, drawing from 26 years of experience, predicted that around 20,000 jewelry stores across the country are likely to close down this year. Moreover, there seems to be no glimmer of hope for improvement in the industry in the coming years. The blind expansion of jewelry stores has outpaced the market’s capacity to sustain them.
Another blogger, “Platinum Chao Platinum Lao Yu,” warned that the closure of jewelry stores is just the beginning, with a more ominous future ahead. Looking ahead, he speculated that 20% to 30% of stores across the Chinese market may shut down in 2026, citing a case of a store owner who closed down a significant portion of their stores last year but failed to see improvements in business compared to the previous year.
Lastly, blogger “Jin Jia Yin – Ice Sister” alluded to the changing attitudes of consumers in the face of economic challenges. Consumers are becoming more cautious and price-conscious, opting for more practical gold purchasing options, custom-made jewelry from goldsmiths, or even direct gold investments rather than overpriced branded jewelry. The era of exploiting consumers with exorbitant markups seems to be fading as economic hardships force young buyers to seek more value for their money.