Gold demand in China fell by 3.5% year-on-year in the first half of the year, according to the China Gold Association, Commerzbank's commodity analyst Carsten Fritsch notes.

Investment demand is significantly more important for price trends

Strong demand for bars and coins, which rose by 24% to 264 tons, prevented a sharper decline. This almost offset the 26% slump in jewelry demand to 200 tons. It is also noteworthy that demand for bars and coins was higher than demand for jewelry."

"While demand for jewelry suffered from record high prices, demand for bars and coins benefited from the high level of uncertainty caused by US President Trump's tariff policy. The data highlights the dual role of Gold, which on the one hand serves as a store of value and safe haven, but on the other hand also has a component with a contrasting development in jewelry demand."

"Investment demand is significantly more important for price trends. Demand for jewelry, on the other hand, has a countercyclical effect and thus serves to stabilize prices."