World Gold Jewellery Demand Dropped 3% in Q3 2017

SEATTLE (Scrap Monster): The ‘Gold Demand Trends’ Report for the third quarter of 2017 released by the World Gold Council (WGC) indicates modest fall in global gold jewellery demand during the third quarter of 2017. The drop in demand was mainly on account of sharp demand decline in India. Meantime, Chinese demand grew during the quarter. Also, Turkey also reported strong quarterly growth in gold jewellery demand.

According to WGC, the global gold jewellery demand totaled 478.7 tonnes, lower by 3% when compared with the demand of 495.3 tonnes during the corresponding quarter last year. This was the weakest Q3 demand recorded during the past 17 years. The year-to-date demand totaled 1,457.3 tonnes, modestly higher by 3% over 2016.

The introduction of stricter regulations on gold purchases and the uncertainties surrounding the implementation of the new Goods and Services Tax (GST) impacted the demand for gold jewellery in India. The country’s demand fell sharply by 25% from 152.7 tonnes in Q3 ’16 to as low as 114.9 tonnes in third quarter of 2017. It must be noted that the country had reported three consecutive quarters of growth prior to this. The imposition of mandatory KYC documentation for all jewellery transactions exceeding INR 50,000 led to huge drop in gold jewellery purchases by consumers. This rule was later lifted during October. The uneven monsoon rainfall across the country was another reason for the knock-off effect on jewellery demand.

On the other hand, the Chinese demand recovered during Q3 this year, after posting 10 consecutive quarters of decline. The jewelllery demand totaled 159.3 tonnes, significantly higher by 13% when matched with the demand of 140.6 tonnes in Q3 ’16. The year-to-date demand totaled 472.4 tonnes, almost in line with the demand during Q3 last year. WGC observed that the demand growth was mainly attributable to the increased holiday purchases.

Meantime, the demand across the rest of Asian region remained weak. The Q3 demand in Japan dropped marginally from 4.2 tonnes to 4.1 tonnes. Malaysia reported 10% decline in demand. However, Vietnam recorded 14% year-on-year surge in demand for gold jewellery to total 3.7 tonnes during the quarter.

The Turkish jewellery demand soared 11% to 10.3 tonnes. The value of year-to-date Turkish demand has reported 25% surge. The Middle East demand was down by 4%. The demand growth in Iran was more than offset by declines in other countries including Egypt, Saudi Arabia and the UAE.

The US recorded the strongest Q3 since 2012, in terms of quarterly gold jewellery demand. The country’s demand totaled 26.9 tonnes. The European demand remained weak, mainly on account of drop in demand in the UK. The other markets remained steady.