The first quarter of this year has seen a “strong resurgence in demand for gold jewellery, bars and coins”, according to the World Gold Council.
The Council’s latest Gold Demand Trends report found that although overall demand for gold fell 13 per cent less in year-on-year, demand for gold jewellery rose 12 per cent.
“Gold jewellery demand experienced a widespread resurgence in the first quarter, reaching a record high value of US$29.9bn as consumers across the globe made their presence felt,” the report said.
The rise in demand was largely driven by India and China, which together accounted for 62 per cent of global gold jewellery demand in the quarter, and generated year-on-year growth of 15 and 19 per cent respectively.
Gold jewellery demand in the US increased by 6 per cent in the same period – the country’s first year-on-year increase since the third quarter of 2005.
“While the top-end of the US jewellery market has been relatively impervious to the economic hardship of recent years, the mass retail and lower-end of the market has suffered considerably,” the report said.
“… Lower-end jewellery demand appears to have experienced something of a paradigm shift in recent quarters as retailers in this space report a core demand for gold among their customer base.
“The fact that gold-plates silver-items has been growing as a category is further indicative of a strong underlying desire for gold jewellery, which is highly negatively correlated to price in this segment of the market.”
Disappointingly the resurgence in gold jewellery demand was not replicated in other Western markets; demand in both Italy and the UK contracted 12 and 7 per cent respectively due to “difficult economic conditions and a continued shift both to lower carat gold jewellery and to silver and non-precious pieces”.