International demand for gold jewellery grew six percent year-on-year to reach 442.5 tonnes in the second quarter of this year, according to the World Gold Council’s latest Gold Demand Trends report.
However, this positive result was heavily impacted by growth in China, India and Turkey which recorded year-on-year demand increases of 17, 16 and 7 percent respectively in the second quarter, and together accounted for 59 percent of global jewellery demand at 260.1 tonnes.
Growth results in the US and Europe were mainly negative in the same period.
Demand for gold jewellery in the US declined by eight percent to total 21.7 tonnes in the second quarter of this year compared with the same quarter in 2010.
“The quarter was characterised by continued thrifting among retailers in order to meet affordable price points and 10 carat items were seen encroaching on the 14 carat market share,” said the report.
“Gold jewellery was also subject to stiff competition from sterling silver, with brands such as Pandora appealing to the mass market, while the rising price of diamonds also proved detrimental to demand for gemset gold jewellery.”
In Europe, Russia was the only country to experience growth, “albeit limited”, in jewellery demand in the second quarter.
“The second quarter was weak for both Italy and the UK, with demand falling by 15 percent and 16 percent respectively.
“Demand suffered as a result of high and rising gold prices, combined with continued economic weakness.
“Hallmarking figures in the UK were lower year-on-ear, although the decline was concentrated in the lower carat segments while hallmarking of 22 carat items remained steady.
“In Italy, gold jewellery has been losing out to high-end, high-design silver products, which are being promoted as more affordable alternatives.”
The quarterly average gold price was US$1,506.13 (as per the London PM fix) during the second quarter of this year.