Gold demand for jewellery dips 3% in Q1 2015

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The World Gold Council has reported a 3% decline in the jewellery industry’s demand for gold in Q1 2015, with the trade calling for 601 tonnes of the precious metal overall.

However, gold for jewellery was still recorded as the most “significant component of overall demand”, with pockets of strength across South East Asian countries, including Malaysia, Indonesia, South Korea, Thailand and Vietnam.

In addition, jewellery demand in India was up 22% to 151 tonnes, while the US and the UK saw further steady growth up 4%.

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Markets in Turkey, Russia, the Middle East and China saw declines in demand to 213 tonnes overall – a dip of 10%.

Across all categories, total demand for gold in Q1 2015 hit 1,079 tonnes, down just 1% compared to the same period in 2014. China and India alone account for 54% of total global consumer demand in the quarter.

Total consumer demand – made up of jewellery demand and coin and bar demand – totalled 854 tonnes, a fall of 5% on the 902 tonnes seen in the same period last year.

Total supply remained virtually unchanged at 1,089 tonnes as a 2% rise in Q1 2015 mine production to 729t was balanced by a 3% fall in recycling to 355t, compared with the same quarter last year.

Alistair Hewitt, head of market intelligence at the World Gold Council, said: “The global gold market’s ecosystem functioned healthily during the first three months of 2015 illustrating the unique nature of gold and its ability to rebalance across sectors and geographies.

“This broadly stable global picture belies regional and sector differences which include: a 10% drop in jewellery demand in China, a 22% uptick in jewellery demand in India and the first net inflows to gold ETFs since 2012, reflecting gold’s resilience and ability to respond to different cues in different ways. Once again, consumers in Eastern countries dominated the market with China and India alone accounting for 54% of total global consumer demand in the quarter”

In value terms, gold demand in Q1 2015 was US$42bn (£26.6bn), down 7% compared to Q1 2014. The average gold price of US$1,218.5/oz was down 6% on the average Q1 2014 price.