Gold jewelry demand fell 36 percent year on year to $21.11 billion during the second quarter that ended on June 30, according to the World Gold Council. By weight, gold jewelry demand dropped 30 percent to 509.6 tonnes. Gold demand in general during the period fell 24 percent to $39.92 billion and declined 16 percent by weight to 1,063 tonnes, according to the World Gold Council.
The group explained that the decline in jewelry demand was predictably dramatic, given such high levels of demand one year earlier. Broad weakness for gold jewelry was noted across Asia and the Middle East, while western markets recorded some improvement, except for Italy, where the fabrication sector is benefiting from improved U.S. demand and re-stocking in other key markets, the World Gold Council stated.
In China, consumers adopted a cautious approach to gold jewelry purchases following a surge of buying activity in 2013. The value of gold jewelry demand fell 50 percent to $6.4 billion during the quarter, however, one year ago the demand had jumped 48 percent. The World Gold Council contended that demand in China simply turned back to more normal levels.
In India, gold jewelry demand fell 25 percent to $6.4 billion. The World Gold Council stated that an "unofficial flow of gold" into India continued during the second quarter, particularly during the first half as premiums were pushed higher. Such flow of gold will likely build momentum over the coming months as the market moves into the seasonally stronger period of Diwali and the wedding season.
Gold jewelry demand across the Middle East plunged 31 percent to $1.9 billion. U.S. gold jewelry demand increased 5 percent to $1.1 billion.
A 20 percent year-on-year decline in Turkish jewelry demand, was the result of domestic issues, according to the group, citing a clampdown on payment by credit card installments.
U.K. consumers drove gold jewelry demand up 10 percent during the quarter and even better, up 25 percent for the first half.
