Q2 gold jewellery consumption negatively impacted by record price
Sales in both France and the UK were reportedly impacted in June by uncertainty linked to elections
Record gold price took its toll on Q2 jewellery consumption as volumes fell 19% to a four-year low of 391 tonnes, according to the latest World Gold Council’s Gold Demand Trends report.
In value, Q2 jewellery demand measured US$29bn (£22.5bn). That was 4% lower y/y as the sharp rise in the gold price did not quite compensate for the decline in volumes.
While China recorded the largest decline (-35%) in gold jewellery consumption, European markets also witnessed a weaker Q2, where regional demand was 3% lower at 15 tonnes.
The report stated that the chief driver of the fall is said to be poor consumer sentiment and economic gloom (especially in Germany). Sales in both France and the UK were reportedly impacted in June by uncertainty linked to elections.
Some markets also saw weak demand for engagement rings and/or a price-led shift to platinum.
Gold jewellery fabrication also dropped 17% to 390.6 tonnes, while gold jewellery inventory reported positive growth of 36% to 20.0 tonnes.
Overall, gold demand excluding OTC in Q2 was down 6% y/y to 929 tonnes as a sharp decline in jewellery consumption outweighed mild gains in all other sectors.
However, adding in OTC investment to total gold demand yielded a 4% y/y increase to 1,258tonnes – the highest Q2 in its data series back to 2000.
Additionally, total gold supply also grew by 4% y/y to 1,258 tonnes. Mine production was up 3% to 929 tonnes, which was a record for a second quarter.
Recycling supply was the highest for a second quarter since 2012, up 4% to 335.4 tonnes, responding to the rising gold price.
Looking ahead, the report stated that in 2024 revived Western investment is expected to flow to balance out weaker consumer demand and potentially slower central bank buying vs 2023.
