Global demand for gold jewellery jumps 52pc in Q1

30 April, 2021 12:00 AM printer

BEIJING: Global consumer demand for gold jewellery rose 52 per cent annually in the first quarter of 2021, marking a “strong improvement” as bullion prices dropped and economies around the world recover from the coronavirus pandemic, according to the World Gold Council.

Consumers bought 477.4 tonnes of gold during the period ending March 31, the trade body said in its latest Gold Demand Trends report on Thursday, report agencies.

“The increase in consumer demand was buoyed by the decline in the gold price from the record highs seen in August 2020,” the industry body said.

“There was a 10 per cent decrease in the gold price over the course of the first quarter which, paired with the global economic recovery, boosted the pro-cyclical elements of gold demand.”

Strong demand for gold jewellery in China and India underpinned global growth. Jewellery demand in China reached 191.1 tonnes during the period, a 212 per cent rise from the first quarter of 2020. In India, it totalled 102.5 tonnes, a year-on-year growth of 39 per cent.

The strong quarterly growth in China was due to “improving domestic economic conditions, lower gold prices and sales booms sparked by Chinese New Year, Valentine’s Day and International Women’s Day”, the council said.

China’s economy also continued to recover from the coronavirus pandemic, with the economy expanding a record 18.3 per cent in the first quarter. Disposable income of residents increased 13.7 per cent year-on-year, which supported the demand, the report said.

In India, substantial wedding purchases, boosted by declining gold prices and improving consumer sentiment “buoyed by a pick-up in economic activity, supported Indian gold jewellery demand in the first quarter”, the report said. India’s economy is expected to grow 12.5 per cent this year after contracting 8 per cent last year, according to International Monetary Fund estimates. That forecast preceded the current spike of Covid-19 infections in the country.

Jewellery demand in Turkey was 5 per cent higher at nine tonnes, while in the Middle East, it was 5 per cent lower as tourism in the region remains limited due to global travel restrictions.