Global gold jewellery demand in 2011 was 3 percent less than in 2010 but nonetheless the value of the demand grew by 25 percent to reach a record US$99.2 billion, according to the World Gold Council.
Released on February 16, the Council’s Gold Demand Trends report suggests that gold jewellery demand in 2011 is “perhaps best considered in half-yearly terms”.
Gold jewellery demand in the first half of 2011 was 9 percent up on the same period in 2010, largely due to healthy demand in the two largest markets, India and China.
“Demand in both countries was aided during this time by one or two opportune dips in the gold price. Gold followed an otherwise steadily rising trend during much of the period, which further fuelled demand by fostering positive price expectations among consumers and allowing them to gradually acclimatise to higher prices…”
However the second half demand of 941.2 tonners was 13 percent less than demand in the same period of 2010.
“Record gold prices reached during the third quarter, combined with an increase in price volatility, deterred consumers in a few key markets – particularly as local gold prices were often increased further as a result of currency weakness. Furthermore the price highs encouraged some substitution of demand away from jewellery and towards investment products.”
The Gold Demand Trends report also noted that gold jewellery demand in the US remained on its long term downward path – the fourth quarter total of 42.7 tonnes was 9 percent below year-earlier levels while full year demand slipped 11 percent to 115.1 tonnes.”
According to the Council, the main influences impacting on US demand were historically high and volatile gold prices; hesitant consumer demand which has been held back by a fragile labour market; depressed real estate prices and a volatile stock market undermining consumer confidence; and increase substitution to alternative metals among jewellery retailers.