Demand for gold jewelry in China grew in the second quarter, driven mainly by the country's better-than-expected economic growth.
The demand rose 4% annually to 78.7 tons in the second quarter in China, including the mainland, Taiwan and Hong Kong, the World Gold Council said in its quarterly gold demand report.
There was an even stronger year-on-year growth in demand on the Chinese mainland of 6%, which boosted its appetite for gold jewelry to 72.5 tons in the period, it said.
"China's mainland proved to be the most resilient among global jewelry markets," said the WGC.
"The mainland stands out in comparison to the 26% decline recorded across the rest of the world." The relative stability of the yuan and China's economic growth have been instrumental in propping up jewelry demand, WGC report said.
A surge in bank lending has helped cushion the impact from the global credit crunch, while an aggressive stimulus package has underpinned the domestic economy.
China's economy grew 7.1% in the first half, with a better-than-expected growth of 7.9% in the second quarter.
The 24-carat gold market is the most resilient while demand for 18-carat jewelry has eased.
The lackluster 18-carat gold jewelry market may be due to a shift in consumer preferences toward platinum, which has benefited from a price fall of about 40% at the retail level this year.
The retail gold investment rose 47% on the Chinese mainland to 17.1 tons in the second quarter.