‘Explosive’: why China’s gold recycling industry is growing at record speed

Sun May 17 2026

China’s gold recycling industry is expanding at its fastest pace in a decade amid sustained fervour in the bullion market and strong investment demand that have fuelled a wave of new entrants into the market, latest data showed.

Business registrations in the sector – which involves firms buying gold bars and jewellery and reselling it – surged 78.74 per cent in 2025 from a year earlier to 740, according to a report published by Chinese corporate data tracker Qichacha. That marked the fastest annual expansion in 10 years, with the report’s author describing the growth as “explosive”.

Momentum has continued into 2026. In less than five months, a further 488 gold recycling-related firms were registered – already surpassing the halfway mark of last year’s total.

The boom comes amid an unprecedented surge in gold prices since last year, driven by heightened geopolitical tensions and a broader de-dollarisation trend. Spot gold briefly touched a record high of nearly US$5,600 per ounce in late January before retreating on recent volatility.

More than half of China’s existing gold recycling-related firms were established in the past three years, with companies less than a year old accounting for the largest share at nearly 30 per cent, according to the report published earlier this week.

By region, these companies were heavily concentrated in southern and eastern China. The south accounted for the largest share at 35.39 per cent, followed by the east with 29.43 per cent, which the report’s author attributed to “vibrant local gold consumption markets and well-developed trading and distribution networks”.

The main anchors of the industry include Shenzhen in the south – home to one of China’s largest jewellery manufacturing and trading hubs centred on Shuibei – and the eastern city of Shanghai, a bullion trading centre through the Shanghai Gold Exchange.

The China Gold Association said in its latest quarterly report that demand for domestic gold investments remained strong in the first quarter. Gold bars and coins were especially popular, with consumption rising 46.4 per cent to more than 202 tonnes.

Even so, gold jewellery consumption remained under pressure over the same period, falling 37.1 per cent year on year to 84.62 tonnes, according to the report published last week.

In its latest gold market commentary for April, the World Gold Council, an international trade association headquartered in London, said global markets appeared to be “treating the Middle East crisis as transitory”, referring to the Iran war.

“Technical momentum looks more vulnerable, rate-cut expectations have moved out the curve and US-led risk appetite has recovered,” said the analysts led by Johan Palmberg, a senior quantitative analyst at the council.

“A catalyst – exogenous or perhaps via a weaker price – will be needed to re-establish the structurally supported uptrend,” they stated.

Source: https://www.scmp.com/