(Yicai) April 26 -- Sales of gold bars and coins in China, the world’s biggest producer and consumer of the precious metal, jumped 27 percent in the first quarter from a year earlier, as buyers snapped up the safe-haven asset amid surging prices.

More than 106.3 tons of gold bars and coins were sold in the country in the three months ended March 31, according to data released by the China Gold Association today. Gold jewelry sales fell 3 percent to 183.9 tons.

China produced over 85.9 tons of gold in the period, a 1.2 percent increase from a year ago, while overall consumption rose 5.9 percent to 308.9 tons, with that for industrial and other purposes up 3.1 percent at nearly 18.7 tons. Imports surged 78 percent to 53.2 tons.

China’s central bank is also on a gold-buying bout, having hiked its reserves of the metal for 17 straight months. They rose by 160,000 ounces in March from February to 72.7 million oz, according to figures released by the State Administration of Foreign Exchange on April 7.

Demand has been strong, even as prices have soared. In the first quarter, major economies continued to implement loose monetary policy, central banks went on raising their reserves, and prices climbed rapidly, repeatedly breaking records, the CGA said.

The Gold London Fixed Price was USD2,214.35 per ounce on March 31, up 6.7 percent since the start of the year. The first-quarter average was USD2,069.8, a 9.5 percent gain on a year ago.

But the high cost of gold and big price swings have increased the risks for producers and sellers. Wholesalers and retailers have become more cautious about buying, while jewelers face higher raw material costs and reduced shipments, with some small and mid-sized firms having even suspended operations, according to the CGA.

The growing interest among Chinese investors in gold has led to substantial investments not only in the physical metal -- in the form of gold bars and coins -- but also gold exchange-traded funds. The holdings of China's gold ETFs rose 8.9 percent to nearly 67 tons in the March quarter.

The trading volume of all gold varieties on the Shanghai Gold Exchange reached 15,300 tons in the quarter, up 32 percent from the same period of last year. By value, trading soared 55 percent to CNY7.49 trillion (USD1 trillion).

On the Shanghai Futures Exchange, total trading volume of all gold varieties reached 29,000 tons, a 15 percent increase. By value, trading jumped 34 percent to CNY12.53 trillion (USD1.7 trillion).

The closing price of Au9999 gold contracts on the SGE at the end of March was CNY527.54 (USD72.80) per gram, up 9.7 percent on the start of 2024. The weighted average price for the first quarter was CNY487.11 per gram, up 16 percent from a year ago.

Editor: Futura Costaglione