Weakness in the UK drags down European jewellery demand in Q1

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The World Gold Council has reported that European jewellery demand was dragged down in Q1 by weakness in France and the UK.

The rest of the region remained stable, while demand fell year on year in France and the UK due to political uncertainties. Demand in France was down 6%, while the UK experience a 3% drop.

On a global level, Indian recovery offset broad global weakness to support Q1 gold jewellery demand at 480.9t.

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Although marginally firmer year on year (1%), jewellery demand remains soft and weak in the long-term context, says the World Gold Council. Demand was 18% below the 587.7t five-year quarterly average.

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The rising gold price was negative for demand, although one or two sharp pullbacks in gold were used as buying opportunities in some markets.

A 9% rise in the US$ price between end-December and end-March restrained demand, although US dollar weakness meant that consumers in many markets were protected to some degree. Gold denominated in local currencies in most key consumer markets gained between 3% and 7%, although Turkey was a notable exception. The sector remains heavily influenced by India and China, which together account for over half of the market (56% in Q1).

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In the West the World Gold Council reports that high-end and online retailers performed strongly, with the online segment gaining strength with continued growth in ‘clicks and mortar’ retailing.

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