By Paul Ploumis
SEATTLE (Scrap Monster): The recently published ‘Gold Demand Trends Q2 2017’ report by the World Gold Council (WGC) has indicated that global demand for gold jewellery surged higher during the second quarter of the current year. However, the demand remained significantly below the five-year quarterly average. The jewellery demand during the first half of the year too stood higher, over the previous year.
The quarterly gold jewellery demand by world countries totaled 480.8t. The demand surged higher by 8% when matched with the corresponding quarter last year, mainly on account of sharp rise in jewellery demand in India. Meantime, the demand stood well below the five-year quarterly average of 586.2t. The demand during the initial six-month period of the year totaled 967.4t, 5% higher over the previous year.
The Q2 ‘17 gold jewellery demand in India has shot up by 41%, rising from 89.8t in Q2 2016 to 126.7t in Q2 this year. The gold imports by the country had spiked to all-time high of 104.6t in May on account of increased stockpiling ahead of the announcement of Good and Services Tax (GST) rate. The demand witnessed sharp upsurge ahead of the GST rollout, with local prices trading at a premium of US$3-4 per Oz in comparison with international prices.
The Indian gold jewellery demand was boosted by festive and wedding season demand. The gold jewellery sales during the gold buying festival Akshaya Tritiya were up by around 30% year-on-year. The higher number of auspicious wedding days in Q2 ‘17, 26 as compared with 8 in Q2 ’16 boosted purchases. The rural sentiment improved further with liquidity on account of remonetisation and expectations of better monsoon rainfall.
Meantime, the Chinese jewellery demand slowed down further during the quarter. The demand declined by 5% over the year to total 137.7t. The Chinese quarterly demand hit the lowest level in past five years, WGC noted. The shift in trend to lower-carat designer jewellery led to the fall in demand. According to WGC, the overall downtrend has moderated so far in 2017. The H1 demand recorded a decline of 4% in 2017.
Elsewhere in Asia, Vietnam’s demand grew by 10% to touch 3.9t. The demand in the Middle East remained essentially flat with 15% rise in demand in Iran more than offset by 20% drop in demand in Egypt. The strengthening of Lira against the dollar coupled with decli8ne in local gold prices led to 20% surge in Turkish gold jewellery demand during the second quarter of 2017.
The US demand was up 4% during the quarter at 26.9t. On the other hand, the European jewellery demand dropped by 4%. The demand in the UK witnessed 10% decline to hit three-year low of 3.8t.