Demand for gold jewellery improved in India, the US and a few Middle Eastern nations in the second quarter of 2019 but rising gold prices and economic challenges continue to impact consumer sentiment, the World Gold Council (WGC) said.
Data from WGC’s Gold Demand Trends Q2 showed that overall gold jewellery consumption was up 2 percent to 531.7 tonnes compared to the same period last year. First-half sales rose 1 percent to 1,061.9 tonnes, with India leading the growth, followed by the US and a handful of Middle Eastern markets.
In India, demand increased 12 percent year on year largely due to a higher number of wedding days compared to 2018, as well as softening of local prices. Demand however fizzled out in June as gold prices reached new highs, mirroring a spike in US dollar prices.
The Indian government’s decision to impose a 2.5 percent rise on gold duty is also expected to take a toll on Q3 demand, WGC said.
The US meanwhile recorded its 10th consecutive quarter of growth as the market recovered from the government shutdown from late 2018 to early 2019. Consumer confidence remains fragile due to the US-China trade dispute, according to WGC.
Jewellery demand in several markets across the Middle East also improved, led by an 8 percent recovery in Egypt amid a strengthening of the local economy. Iran and Turkey however saw a 5 percent and 4 percent decline, respectively.
China also recorded a 4 percent drop in jewellery demand, owing to a traditionally slow quarter.
“Chinese jewellery demand was relatively upbeat in April and May as showrooms tempted consumers with promotions and continued innovation/development of premium products. But demand ground to a halt once the June price rally began and retailer’s promotional efforts could not tempt consumers back. Reportedly, showrooms were deserted as the quarter came to a close,” WGC said.
Consumers also shifted their attention towards innovative and higher-purity items, the council added.