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A strategic shift in China’s gold market:insurance capital as a catalyst for industry evolution

Entry of US$25 bn in Chinese insurance funds into the gold market

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China’s gold market is poised for a transformative phase following a groundbreaking policy allowing insurance funds to enter the gold investment and leasing space. As detailed in Liang Weizhang’s in-depth analysis, the “Pilot Notice on Insurance Fund Investment in Gold Business”, issued on February 7, 2025, marks a significant shift in the country’s financial and commodity landscape. Ten leading Chinese insurance firms are now permitted to engage in gold transactions through the Shanghai Gold Exchange, potentially mobilizing up to US$25 billion in capital.

While international markets such as the US, UK, and EU already allow regulated insurance investment in gold, China’s move represents a new frontier in leveraging institutional capital to strengthen domestic market liquidity and sophistication. Despite concerns that large capital inflows might inflate gold prices and impact jewellery consumption, the policy imposes strict caps—limiting investment to 1% of total insurance assets—thus mitigating inflationary risks. Instead, this structured participation is seen as a stabilising force that could renew consumer confidence in pricing and support market resilience.

A major highlight of the reform is the expansion of gold leasing, an efficient financing model that reduces operating costs for jewellery manufacturers and retailers. Insurance funds, through financial intermediaries, will provide greater liquidity to this segment, which is already gaining traction in China’s gold economy.

Beyond the financial implications, the policy also underscores the need for continuous innovation in China’s gold and jewellery industry. With high gold prices suppressing traditional demand, firms are increasingly turning to advanced technologies such as 3D and 5D hard gold to create lighter, trend-driven designs. This is especially relevant as younger consumers and e-commerce platforms drive market shifts.

Strategically, the entry of insurance funds is viewed not just as a policy experiment but as a signal of China’s broader ambitions—integrating gold more deeply into financial markets and asset portfolios. It reflects a maturing regulatory mindset, growing global integration, and a push towards diversifying financial instruments tied to gold.

Ultimately,  this initiative is catalyzing a “gradual revolution” in the gold industry, transforming how gold is viewed—from ornamental asset to financial instrument. Enterprises that embrace this transition, foster innovation, and leverage global opportunities are likely to emerge as the long-term beneficiaries in an evolving gold economy.

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JB Insights

Festive & Wedding Season Trade Outlook: Resilience, Innovation, and Growth

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JewelBuzz spoke to trade and industry leaders who said thatstrong consumer affinity for gold as a safe-haven and emotional asset, and high demand for lightweight, design-focused offerings are driving renewed momentum. Although higher price points may decrease overall volume (by weight), total revenue and consumer trust in gold as a store of wealth remain strong.

The Indian retail jewellery sector is approaching the crucial Diwali, and upcoming wedding seasons with a mixture of pragmatic caution, strategic innovation, and underlying optimism.

Following a period of sluggish sales driven by record-high gold prices and market volatility, industry leadership expects a noticeable turnaround. Decreasing or stabilizing gold prices, strong consumer affinity for gold as a safe-haven and emotional asset, and high demand for lightweight, design-focused offerings are driving renewed momentum.

While overall physical volume (by weight) may remain subdued or flat compared to previous years, overall sales value is projected to grow anywhere from single/low-double digits up to 20%–25%, depending on retail positioning and product portfolio.

Key Market Dynamics & Consumer Trends

1. Sluggish Past Months & Strategic Pivots to Lightweight Collections

Prior to the festive onset, retail sales experienced a downward trend due to price volatility. However, jewellers are actively countering this by shifting focus toward lightweight gold, close-set natural diamonds, silver artifacts, and platinum lines. As N. Anantha Padmanaban (Chairman, NAC Jewellers) notes:

“Sales has been on the downward trend due to various reasons for the past few months, but we are expecting good sales with gold prices coming down during Navratri & Diwali…”

Retailers are innovating across price points to capture value-conscious shoppers. NAC Jewellers, for instance, has introduced lightweight gold options such as the traditional cow-themed Surabhi collection, lightweight silver lamps for Dhanteras, and close-set diamond lines to stimulate demand.

2. Emotional Connection & Bridal Resilience

Despite elevated rates, consumer trust in gold as both an emotional asset and cultural anchor remains steadfast. Addressing the underlying consumer sentiment, Dr. Pratap Madhukar Kamath (MD, ABARAN) emphasizes:

“We remain highly optimistic about jewellery sales during the ongoing festive season and the upcoming wedding season. Despite elevated gold prices, consumer sentiment continues to be encouraging, reaffirming gold’s timeless significance…”

This sentiment translates into steady interest across traditional bridal jewellery, contemporary lightweight pieces, and investment-oriented purchases ahead of the heavy wedding dates.

3. Industry Call for Patience & Wedding Stability

Addressing market anxiety surrounding gold rate fluctuations, Rakhal Gontla (Jt MD, Vaibhav Jewellers) offers a reassuring message to the trade:

“My message to the trade and industry is simple: Don’t panic. These may be challenging times, but it is important to stay resilient, hold your ground and navigate the market with patience and perseverance.”

Marriage-related sales are expected to stay particularly healthy, backed by gold’s central role in traditional ceremonies.

4. Volume Subdued, Value Growth Driven by Gen Z & Alternative Metals

Rising gold rates have led to a division between physical volume and monetary sales value. Jayantilal Challani (Chairman, Challani Group Of Companies) observes:

“The jewellery industry expects a cautious and value-driven festive season, with total sales value projected to grow in single or low-double digits even as physical volume remains subdued due to record-high gold prices.”

To bridge this gap, jewellers are tapping into Gen Z buyers who favor minimalist designs—such as thin chains, stud earrings, and understated rings—and shifting attention toward natural diamonds and alternative metals.

5. Natural Diamonds & Expanding Value Expectations

As gold prices surge, natural diamonds are gaining significant market share, evolving from purely bridal wear to everyday lifestyle pieces. Eshwar Surana (MD, Raj Diamonds) projects strong growth in value:

“We believe the festive season will add sparkle to jewellery sales, and we expect it to grow 20–25% in value. We have already witnessed a strong and encouraging customer response…”

Rising disposable incomes and millennial demand for meaningful investment pieces are helping power this 20%–25% value surge.

6. Transparency & Consumer Confidence

Navigating periods of high pricing requires absolute trust. Dr. C. Vinod Hayagriv (MD, C. Krishniah Chetty Jewellers) cautions against misleading retail tactics while noting a muted initial sentiment:

“The sentiment for the festive season is muted… It is essential that we maintain consumer confidence with genuine sales promotions. Without inflating prices and artificially discounting—which erode consumer confidence.”

Maintaining genuine promotional integrity is seen as vital for matching or modestly exceeding last year’s festive performance.

7. Gold’s Intrinsic Value Amid Volatility

Concluding the trade sentiment, John Alukka (Jt MD, Jos Alukkas) points out that elevated gold rates actually reinforce consumer belief in the metal’s enduring value:“

Consumers are constantly seeking value and they find it in gold. In fact the consumer trust in gold has increased because of the higher value. There could be slight hesitation and confusion because of rate variations…”

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JewelBuzz is Asia’s First Digital Jewellery Media & India’s No.1 B2B Jewellery Magazine, published by AM Media House. Since 2016, we’ve been the trusted source for jewellery news, market trends, trade insights, exhibitions, podcasts, and brand stories, connecting jewellers, retailers, and industry professionals worldwide.

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