It’s been a long time but finally it appears that consumers in the United States are returning to gold jewellery.
The World Gold Council said last week that for the first time in nearly seven years, there was a year-over-year increase in the demand for the precious metal in jewellery. “The U.S. gold jewellery market appeared to reach an inflection point,” the WGC said in its Gold Demand Trends (.pdf file) for the first quarter of 2013.
Gold jewellery demand in the U.S. for the first quarter of 2013 grew by more than 5% year-over-year to reach a value of $986 million, according to the report. This is the first increase in demand since the third quarter of 2005.
The increase was largely at the lower-end of the market, according to the report, noting that it’s “a further positive sign of recovery in the U.S. economy, coinciding with a correction in the gold price over the course of the quarter.”
Yes, the WGC said that in addition to positive economic signs, the recent fall in the price of gold has also aided its recovery. I don’t believe that. It will take months for the current gold prices to have an impact on gold jewellery sales on the retail level. This makes the sudden turnaround in gold jewellery demand even more remarkable to me. Once the falling price of gold actually hits the retail market, I think there will be an additional improvement in sales.
This is just another layer of good news to hit the U.S. jewellery market. As I noted last week, jewellery store sales rose 9.9% year-over- year in March to $2.31 billion, according to U.S. Department of Commerce data, which also noted that sales for the first quarter increased 8.2% year-over-year to $6.99 billion. Barring any sudden change in the political or economic environment, this period of growth should continue.
Other highlights of the WGC Gold Demand Trends report include:
* Despite the growth in U.S. gold jewellery demand, overall demand is largely limited to India and China. The two countries combined now account for 62% of gold jewellery demand, according to the report.
* Gold jewellery demand surged by 19% in China to a record level, led by Chinese New Year gifting in January and a rebound in consumer sentiment, WGC said. This is despite new leadership in China calling for less conspicuous consumption. Demand saw the largest increase in 24k gold jewellery, although demand for 18k gold jewellery also increased.
* In India, year-over-year demand grew by 15% and came just short of beating the fourth quarter 2012 record. However, that gain was compared to a very soft first quarter of 2012.
* Meanwhile, gold jewellery demand in Italy and the U.K. fell dramatically, 12% and 7% respectively, as difficult economic continues continue to lead consumers to purchase lower-karat gold and silver jewellery.
Source:
http://www.jewellerynetasia.com/en/Blog/327/Has_Gold_Jewellery_Regained_its_Lustre_in_the_U_S_.html?user=6
