Demand for gold jewellery reached a record US$28.4bn in value in the first quarter of this year, according to the World Gold Council.
Released this month, the Council’s Gold Demand Trends report for the first quarter of 2011 said that jewellery demand in the first quarter of this year totalled 556.9 tonnes – seven percent more than the 521.3 tonnes recorded in the same quarter last year.
However the report’s authors are quick to point out that despite the positive growth figures, the regional breakdown of jewellery demand shows a story of two halves: strength in India and much of the East Asian region contrasting with broad weakness in the western and Middle Eastern markets.
Key findings in the report include:
• India once again provided the main pillar of demand for gold jewellery, accounting for 37 percent of the global total. Demand of 206.2 tonnes in the first quarter of 2011 was 12 percent up on the year-earlier period and represents the strongest quarterly number since Q3 2008.
• Chinese consumers also continued to flock to gold jewellery during the first three months of 2011, pushing demand up 21 percent year-on-year to 142.9 tonnes.
• In percentage terms, Hong Kong was the strongest growth market for gold jewellery, with demand up 32 percent year-on-year at 7.3 tonnes.
• While a marginal market, Taiwan was the outlier in the Greater China region, recording a year-on-year drop in gold jewellery demand of -9.4 percent.
• Across the rest of the Asian region, the picture was largely negative. Japan was the weakest of all markets as consumers were overwhelmed by the earthquake and subsequent tsunami that devastated much of the northern prefectures in early March.
• The Middle Eastern markets generally experienced a very weak quarter, kept in check by climbing gold prices and political unrest: Egypt’s first quarter demand fell 39 percent to 10.9 tonnes and Saudi Arabia posted a decline of 19 percent to 13.1 tonnes. The UAE was the exception within the region as demand grew year-on-year to total 19.8 tonnes.
• Russia was again alone among the western markets in witnessing a rise in gold jewellery demand with first quarter demand in 2011 rising 7 percent year-on-year to 16.7 tonnes.
• Consumers in the US continued to feel the pinch: the volume of demand for gold jewellery slipped 10 percent year-on-year to 20.5 tonnes.
• Demand across Europe continued to decline. In Italy first quarter demand dropped 11 percent year-on-year to 4.7 tonnes while in the UK quarterly demand dropped 17 percent to 3.1 tonnes.
The World Gold Council concluded that sustained momentum in Chinese and Indian jewellery demand will underpin growth in the jewellery sector throughout 2011.