The gold market has delivered a historic performance in recent years, with international prices surging from around $2,000 per ounce in 2023 to a peak of roughly $5,500 per ounce in early 2026, before a notable correction brought trading to approximately $4,000 per ounce. This has made gold a dominant topic among young investors, overshadowing traditional fund investments. Amid the price volatility, questions arise about whether this is a short-term rally or the start of a long-term trend, and what role gold should play in household asset allocation as the macroeconomic environment slows. The World Gold Council China CEO provides insights into these dynamics.
From Monetary Anchor to Wealth Anchor: Rebuilding a New Core in a Multipolar World
The investment logic of gold remains unchanged, but certain influencing factors have evolved. The CEO emphasizes that gold should be viewed as a new core asset in a multipolar world. Many market participants focus on short-term events like geopolitical conflicts or oil price fluctuations, questioning gold's value when short-term volatility erases annual gains. However, this perspective overlooks the fundamental shift in the post-war political and economic order, which has driven gold from $2,000 to over $5,000 in three years. Gold's role is transitioning from a "monetary anchor" to a "wealth anchor" in an era of uncertainty. Since 1971, gold has delivered an annualized return of about 8% in USD terms with 17% volatility over 20 years, offering superior risk-adjusted returns compared to declining fixed-income products. Investors should consider allocating 5% to 10% of their portfolio to gold as a safety net for household assets. True diversification involves placing a strategic base allocation in gold, rather than merely spreading investments across different stock sectors.
Learning from Central Bank Gold Buying: The Wisdom of Prioritizing Safety
The trend of central banks increasing gold reserves has inspired a "follow the central bank" approach among investors, which the CEO considers a smart strategy. Central banks prioritize safety first, then liquidity, and finally returns, unlike ordinary investors who often chase returns while ignoring risk, leading to volatile asset values. As Chinese household wealth grows, investors can shift their mindset to allocate a portion of assets for "protective investment" rather than purely seeking high short-term returns. The key lesson from central banks is to prioritize security for long-term stability over short-term gains.
Gold Jewelry Industry Transformation: Moving Beyond Scale Obsession
In the gold jewelry sector, the CEO calls for a period of reflection as the market's recent heat included speculative elements, making a correction necessary to temper those seeking quick profits. The industry is at a critical juncture, transitioning from rapid, large-scale expansion to a focus on quality and operational precision. While many jewelry professionals find current conditions challenging, adapting to this trend by identifying unique operational strengths, especially in quality enhancement, is essential for success. Observations from a visit to a leading jewelry manufacturer in Shenzhen reveal state-of-the-art, domestically produced, intelligent machinery that is both environmentally friendly and highly productive. Over the past five years, China's gold jewelry industry has caught up with global leaders in processing quality, craftsmanship, and design capabilities. This industrial strength supports the "New Silk Road Innovation Gold Jewelry Export Initiative," with the rise of "hard pure gold" products offering cost-effective options that appeal to Gen Z's aesthetic and expressive needs.
Brand Globalization: Hard Pure Gold Embodies the Silk Road Ambition
The "hard pure gold" category has emerged as a standout growth driver in China's gold market, addressing high gold prices and consumer budget constraints while meeting youthful demand. This innovation positions it as a flagship product for export. Without this category, the global expansion plan would be less feasible. Hard pure gold achieves superior aesthetics with lighter weight, making it suitable for global markets due to its lightweight and fashionable characteristics. Progress on the initiative includes participation in the Hong Kong Jewelry Show, with expanded exhibitions planned for September, accelerating China's hard pure gold presence on the world stage. This represents a combined effort of production capacity export and brand globalization, with Chinese jewelry retail brands expanding beyond Southeast Asian Chinese communities into markets like the Middle East, India, Europe, and the United States.
Engaging Gen Z: Telling the Gold Story in Their Language
Addressing Gen Z as a growing consumer base, the CEO expresses optimism and a forward-looking approach. Young consumers are increasingly interested in gold's investment value, and it is important for them to recognize its role as a wealth foundation. New investors should start with small, regular contributions to build sound long-term investment habits. In the jewelry consumption space, the biggest challenge is solving the "last mile" of retail—communicating with young consumers in their own language and preferred methods. Excellent products exist, but attracting consumers requires understanding why they should purchase from you. The World Gold Council plans to launch new hard pure gold advertising campaigns in the third quarter, adopting more youthful language and expressions to strengthen emotional connections with younger consumers and add sentimental value.
Commitment to Core Values: ESG as an Entry Ticket to the Future
Addressing the challenge of balancing survival with ESG responsibilities, especially for small and medium-sized enterprises facing cost pressures, the CEO asserts that ESG is not an optional extra but a mandatory requirement for those aiming for international growth. During difficult times, companies must not cross ethical boundaries. Urging the industry to avoid illegal or extreme actions for survival, the CEO emphasizes that investment in technology development and manufacturing capability improvement is the path to future growth. Maintaining core values, practicing long-termism, and persisting in innovation are identified as the essential routes for China's gold industry to overcome bottlenecks in the coming decade. Just as the Yellow River in Lanzhou flows continuously, the gold industry undergoes refinement to reveal its true value amid great changes. For investors, the advice is to embrace gold as a stabilizing wealth anchor rather than panicking over price fluctuations.
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