Global gold jewellery demand up 18% in first three quarters of 2010

Last year, in 2010, the prices of gold have seen a remarkable upswing, despite which demand for gold jewellery and investment has seen a rise, as per the Gold Investment Digest by the World gold Council. The rise in demand pushed gold prices up by 29.2 percent, to $1,405.50 an ounce, by December 30, which was also a decade of continual increase in prices. There was a 25.9 percent increase in average gold price from $972.35 an ounce, in 2009 to $1,224.52 an ounce in 2010. The second and fourth quarter of the year saw a higher jump in prices. Prices in the four quarters rose 2.6 percent, 11.5 percent, 5.1 percent and 7.5 percent, respectively.

India and China were the biggest drivers of gold investment demand and jewellery demand, which impacted prices to rise further. The global demand for gold jewellery did considerably well, in comparison to the investment demand which was spurred by the sovereign debt crisis in Europe and higher inflation expectations. Demand for gold jewellery was up 18 percent, to 1,468 tons, in the first nine months of 2010, from 2009, while in value terms it stood at $55.5 billion in the said nine months (equaling the value of gold jewellery demand for the full year 2009). The WGC report attributes the increase in jewellery demand to the improved economy and currency appreciation in key gold consuming nations – India and China and the improvement in consumer mindset towards gold jewellery as a wealth creation and symbol of affluence.

Infact in the U.S. , although the value of gold jewellery imports dipped in the U.S. by 8 percent in September 2010, and gold demand fell in the first nine months of the year in the United States, there was a rise in sale of gold pieces worth $1,000 and above, triggered by purchases by affluent consumers. The report also estimates this section of affluent purchases to help offset a dip in the sale of gold pieces priced at middle and lower price points, even though the volumes of sales were not upto the 2009 levels.

India’s consumption of gold jewellery rose 73 percent, to 513 tons in the first nine months of 2010, while in other markets the consumption rose but at lower levels : Hong Kong by 27 percent, Russia by 19 percent and mainland China by 8 percent.