Jewellery demand remains under pressure

May 07, 2024

Global demand for gold jewellery in Q1 came in at 479t, around 3% above the first quarter average from the past five years of 465t. While gold jewellery volumes were slightly lower than Q1’23, the value of demand confirms that consumers were far from reluctant to spend on gold jewellery even as prices shot up.

The US dollar value of global gold jewellery consumption in Q1 was 7% higher y/y at US$32bn – the highest value for a first quarter demand since 2013 (when volumes were far in excess of recent levels). Q1 was a tale of two halves: a positive January and February versus a very weak March.

The relative stability in the gold price during the first two months of the quarter aided demand during that period: by mid-February, the US$ price had undergone a gentle price pullback of around 4%. Given that this occurred in the lead-up to the lunar New Year it was well-timed to attract jewellery consumers in Asian markets. However, demand collapsed in March as the gold price rocketed and in some markets this resulted in a negative y/y comparison.

Key takeaways are,

1: First quarter gold jewellery consumption of 479t was 2% softer y/y,

2: Initially aided by the mild correction in the gold price during January and February, demand pulled back as the March rally took off &

3: Jewellery demand remains under pressure so far in Q2, due to unprecedented price levels. Although buying will likely be encouraged by any price pullbacks, we expect a subdued y/y comparison.

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