Gold Jewellery Demand Recorded 2% Decline in Q2

SEATTLE (Scrap Monster): The challenging conditions in a few key markets led to 2% year-on-year decline in global gold jewellery demand in Q2 this year. The demand dropped from 519.4t in second quarter of 2017 to 510.3t in Q2 ’18. The key drivers of the decline were India and the Middle East. On the other hand, the U.S. and China reported demand growth during the quarter. The overall demand during the initial six-month period of the year remained almost flat at 1,031.2t, as compared with the year before.

The Indian gold jewellery demand was down sharply by 8% to 147.9t, mainly due to high domestic gold prices and a bunch of seasonal factors. It must be noted that the demand had peaked during the corresponding quarter last year, ahead of GST implementation. The gold demand witnessed moderate boost during the beginning of the quarter, on account of Akshaya Tritiya and wedding season. However, the demand failed to sustain as weakening local currency led to elevated domestic gold prices.

Meantime, Chinese markets reported continued recovery in demand, with jewellery demand surging higher by 5% to touch 144.9t during the quarter. Traditional 24-carat jewellery continued to dominate, accounting for nearly 70% of the total demand. The quarter also witnessed strong shift in demand to alternative newer products. Elsewhere in Asia, Indonesian demand touched 3-year high. Vietnam too recorded 14% rise in Q2 demand.

The jewellery demand across the Middle East markets witnessed huge declines, Iran leading from the front. The country reported the biggest drop in demand of 35%, followed by the UAE (down 24%) and Saudi Arabia (down 10%). The only market to see gold demand growth was Egypt.

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The Turkish jewellery demand dropped by 10%, whereas the U.S. demand reported the strongest Q2 in nearly ten years. Europe too reported marginal growth in demand.