Recently World Gold Council analysed jewellery demand in the recently published Gold Demand Trends for 2Q 2025. Jewellery retailers in China are likely to face an equally glum H2. One silver lining perhaps is that platinum is unlikely to offer much of a challenge, given the sensitivity to its strong price rise.
Another is that high savings rates might offer some capacity to buy in H2, but probably needs stimulus and a brighter outlook for 2026 and beyond. In India, the economy is still vibrant but is expected to soften a little in H2. Combined with high prices, jewellery demand will likely remain subdued as consumers are anecdotally adapting less quickly to high prices than they have historically.
This theme is likely echoed in other regions. Flat or lower prices won’t elicit the same response one might see in an environment where disposable income is solid. Thus, our expectation for weak full year jewellery demand remains in place.
Although a source of supply, recycling is tightly linked to jewellery. It is particularly relevant in India and China where it traditionally facilitates the flow of new jewellery for old (except for when exchange and collateralised loans are used).
Notably, over the past few quarters, recycling has been constrained in the face of rising prices. The suggested reasons are,
1: Geopolitical risk premia – anecdotally evident in the Middle East,
2: A shift in price sensitivity – a willingness to hold on to gold in the expectation of even higher prices – evident in India with trade-ins and monetisation of gold jewellery &
3: A lack of economic distress – although slowing, real personal income growth remains positive and there are no imminent signs of distress.
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