Editor’s Note
China’s latest policy shift—curbing speculative paper gold while bolstering the physical market—carries direct implications for jewelers, from pricing and margins to scrap trade dynamics.
China restricts speculative trading in paper gold while simultaneously strengthening the physical gold market. For jewelers, this is more than just a financial market update: it affects material prices, sales conversations, and the scrap gold business.
When the market focuses more on real material, the actual physical demand could have a stronger long-term impact on the gold price. For jewelers, this has direct consequences: purchase prices, manufacturer calculations, margins, and selling prices become even more closely tied to material value.
The more real material takes center stage, the more important traders who can explain, evaluate, purchase, process, and sell gold become. Therefore, the specialized trade should not view gold merely as a raw material, but as a strategic asset.
The gold market is shifting. In China, the Industrial and Commercial Bank of China has announced it will stop paper gold trading for retail customers. From July 24, 2026, Chinese customers will no longer be able to speculate on the gold price through this bank. Other banks have reportedly taken similar steps. The withdrawal is primarily attributed to high volatility in the precious metals trade.
For the jewelry trade, the individual bank decision is less critical than the larger movement behind it: speculative paper products are coming under pressure, while physical gold is gaining strategic importance.
Paper gold tracks the gold price without actual gold being moved in every transaction. Physical gold, on the other hand, is real and tangible: as bars, coins, semi-finished products, jewelry, or scrap gold.
This makes gold more complex to explain in the store, but also provides stronger arguments.
The withdrawal from paper gold aligns with a larger development. Hong Kong has launched a central gold clearing system and aims to expand its storage capacity for gold to 2,000 tons by 2030. This also shows that in Asia, the focus is not just on financial products, but increasingly on real holdings, storage, and delivery.
For the specialized trade, this is an important signal: gold remains not only an investment product internationally but is being positioned more strongly as a physical anchor of trust.
Jewelers primarily sell emotion: love, memory, status, and occasion. But in uncertain times, another argument gains importance: value retention.
When central banks worldwide continue to view gold positively, the specialized trade can use this argument in customer conversations. According to the World Gold Council, 89 percent of surveyed central banks expect global gold reserves to increase over the next twelve months. A record 45 percent even expect to increase their own gold reserves.
The message for customers is clear:
This development is also relevant for gold buying. If physical gold remains sought after worldwide, consumer awareness of their own holdings increases. Old jewelry pieces, broken chains, dental gold, or heirlooms are increasingly perceived as value. For jewelers, this creates foot traffic, consultation opportunities, and often new business.
Those who buy scrap gold professionally, transparently, and trustworthily become the go-to contact in the region. Old gold can be transformed into new jewelry. Buying can become customer loyalty.
The debate about paper gold is not a purely financial topic. It directly affects the jewelry trade. The key is a combination of emotion, substance, and trust.
What is your opinion? Do jewelers already use the argument of “physical value” strongly enough in sales conversations? Or is gold jewelry still too often explained only through design and price? Discuss with us on LinkedIn or write to us at the BlickPUNKT·Juwelier editorial team.
