Global gold jewellery demand up 20% in Q2

The 'Gold Demand Trends' report published by the World Gold Council for the second quarter of the year has noted a rise in the value and volume of global gold jewellery demand (on y-o-y basis), but the demand for gold has dropped in the three months.

The global gold demand dropped 23 percent to $38.952 billion, while in volume terms it dropped 12 percent (on y-o-y basis) to 856.3 tonnes. The report attributes the fall to the outflows from ETFs, and also noted that this was mitigated by record demand for gold bars and coins, which rose 56 percent to $23.091 billion, in the three months.

The global demand for gold jewellery increased 20 percent (on y-o-y basis) in value to $26.179 billion, and in terms of volume it rose 37 percent to 575.5 tonnes. The demand from India and China helped propel the same. India's demand for gold jewelry rose 33 percent to $8.6 billion, while China's demand rose 35 percent to $7.6 billion. Middle East's gold jewellery demand was up 17 percent to $2.5 billion. In Japan, the demand in value terms dropped 12 percent to $205 million, and also slipped in the U.S. markets by 10 percent to $921 million. The said demand was down 25 percent to $324 million in Europe. The drop in gold prices influenced a rise in demand, the report suggest.India and China accounted for almost 60 percent of the global jewelry sector and around half of total bar and coin demand.

The report noted that ''The resultant buying frenzy caused a huge rise in regional premiums on gold, as supply chain bottlenecks caused delays in meeting demand. The upward trend was almost universal, with the most notable year-on-year improvements occurring in India, China, the Middle East and smaller Asian countries. The focus in most markets was on higher karat jewelry with its connotations as an investment proxy." Also, the rise in demand was recorded both at the consumer and trade levels. But in the coming months, the WGC expects demand in India to decline, as the country works out ways to align with the gold import restrictions.

The gold buying for technology declined 11 percent to $4.743 billion, while investment demand dropped 68 percent to $4.794 billion. The demand for central bank net purchases declined 62 percent to $3.236 billion.