Global demand for gold jewellery fell 18 percent year on year to $23.73 billion in the first quarter that ended on March 31, according to the World Gold Council (WGC).
The decrease was price related as gold demand for jewellery by volume actually rose 3 percent to 570.7 tonnes, representing the strongest start to the year for jewellery since the first quarter of 2005.
WGC noted a 10 percent increase in demand for gold jewellery from China, which became the largest market for gold in 2013. The average weighted price of gold for the period fell 21 percent year on year to $1,293.10 per ounce.
Overall, gold demand, including supplies for jewellery, technology, investment and from central banks, fell 21 percent to $44.67 billion, while by volume, demand held steady at 1,074 tonnes.
“It is clear that the longer term underpinnings of the gold market, such as jewellery demand in Asia, remain firmly in place demonstrating the continuing resilience of the gold market and the unique nature of gold as an asset class, rebalancing to reflect demand, ” said Marcus Grubb, the managing director of investment strategy at WGC.
China’s consumers generated the highest demand for gold jewellery by weight, as consumer demand rose 10 percent to 203.2 tonnes buoyed by cultural gift-giving to celebrate the Chinese New Year and Valentine’s Day. By value, gold jewelry demand in China fell 13 percent to $8.448 billion.
Demand for gold jewellery in India dropped 9 percent by weight to 145.6 tonnes, mainly as a result of ongoing import restrictions coupled with further import obstacles as a result of the country’s government elections. By value, India’s demand fell by 28 percent to $6.053 billion.
Nonetheless, WGC said it continues to view India as a source of strong, latent demand which will be unleashed when government restrictions on gold are eased.
Gold jewellery demand in the Middle East, fell 10 percent to $2.27 billion and U.S. demand slipped 16 percent to $795 million.