China’s gold demand has cracked in the face of record-high prices for the precious metal, with sales at the country’s jewelers in a funk as buyers hold off on purchases.

Total demand for bullion fell almost 6% from a year earlier in the first half to 524 tons, the China Gold Council said in a quarterly report. The data imply a dramatic 52% plunge in jewelry purchases in the second quarter, according to Bloomberg calculations.

It’s a sharp turnaround from the first three months of the year, when buying by China’s central bank and the nation’s consumers — as a hedge against a long-running property downturn and volatile stocks — helped push gold to successive records. The People’s Bank of China halted purchases in May and June, following an 18-month buying spree.

There are now clear signs that the lofty prices and China’s sluggish economy are hitting sales of discretionary items like jewelry. However, impending Federal Reserve interest-rate cuts and heightened haven demand due to an array of geopolitical uncertainties — including the US presidential election in November — are still aiding global gold prices.

Purchases of jewelry fell 27% in the half, the council said. That was partially offset by sales of bars and coins, which jumped 46% from a year earlier. Jewelry commands higher premiums than bars and coins, the council said. The figures in the report include jewelry, bars and coins and industrial consumption but not central bank purchases.

The recent surge in gold is weighing on cyclical Chinese consumption, Goldman Sachs Group analysts said in a note last week. However, a demand boost from less confidence about the economy and lower interest rates, is roughly offsetting the hit from lower incomes, they said.

Major China-focused gold retailers including Chow Tai Fook Jewellery Group have reported much weaker sales in the quarter through June, while Chinese bullion imports slumped last month.

At jewelry stores in downtown Shanghai last week, the mood was gloomy.

“Our sales are super-weak here,” said a saleswoman surnamed Zhang, who declined to give her full name when citing company information. “It’s to do with the gold rally, but also due to falling personal incomes,” she said. “Gold is not a necessity.”