(Yicai) Nov. 3 -- Falling gold prices are drawing Chinese consumers back to jewelry stores, with foot traffic at some outlets rising 20 percent to 30 percent month on month.

China's benchmark gold price fell below CNY860 (USD129) per gram on Oct. 30, down more than CNY400 per gram from this year's peak. International spot gold dropped to USD3,869.96 per ounce, its lowest level since early October 2025, before closing at USD3,875.19, about 30 percent below January's high of roughly USD5,600.

The price slump has unleashed pent-up demand, with some jewelry retailers reporting a double-digit increase in shoppers, Bai Wenxi, vice chairman of the China Enterprise Capital Union, told Yicai.

Lower prices are expected to encourage more consumers to trade in old jewelry for new pieces and make purchases for personal enjoyment in the short term, Bai from the business and investment association said.

On Nov. 1, Yicai observed crowds of shoppers browsing gold jewelry counters at a jewelry mall in Shijiazhuang, a city in northern China. At stores operated by Hong Kong-based jewelry retailers Chow Tai Fook and Chow Sang Sang, some outlets had six or seven groups of customers shopping simultaneously, even during dinner hours. Gold jewelry prices at these premium brands have generally fallen by more than CNY500 per gram from their peaks at the beginning of the year, according to available data.

However, analysts remain divided over whether the recovery in demand will last. Lower gold prices may make consumers more inclined to wait before buying, Pan Helin, an economist and government policy adviser, told Yicai. Gold remains in a “weak bottoming-out” phase because the US Federal Reserve is in a rate-hiking cycle and US Treasury yields are continuing to rise, he said. A shift toward monetary easing in the US could change the direction of gold prices, Pan added.

Bai expects gold prices to remain weak and range-bound in the short term. Over the longer term, however, factors such as high global debt levels and de-dollarization, or efforts to reduce reliance on the US dollar in global trade and finance, suggest that the current correction is more of a “mid-cycle pause in a bull market” than a reversal of the upward trend, he said.

Editor: Emmi Laine