Gold jewellery demand rose slightly in the second quarter of the year amid high gold prices primarily due to steady recovery in the China market post-lockdowns in 2022.

Overall jewellery consumption showed a moderate increase of 3 per cent year on year to 476 tonnes in Q2, buoyed by stronger performance in China, which offset a single-digit decline in India, revealed data from the World Gold Council’s (WGC) Gold Demand Trends Q2 2023. China and India are the world’s largest gold jewellery markets.

“Demand virtually flatlined from the previous quarter, taking first-half demand to 951t,” WGC said. “Fabrication volumes of 491t in Q2 resulted in inventory growth of 15t. In part, this stock build was the result of Chinese demand falling short of manufacturers’ expectations.”

China saw a 28 per cent uptick in Q2 jewellery demand to 132.2t while H1 figures were up 17 per cent to 328t. The end of zero-Covid policy alongside pent-up wedding demand and gold’s unique allure as both an investment tool and everyday accessory effectively lifted Q2 consumption in the country.

India, for its part, recorded declines of 8 per cent in Q2 and 12 per cent in H1 mainly due to high gold prices. 

According to WGC, gold prices remained historically high in Q2, reaching US$2,037.15 per ounce in May and US$1,908.30/oz towards the end of June. By comparison, gold prices were around US$1,800/oz in early January 2023.

“In the context of the very high gold price environment, jewellery demand has been remarkably resilient so far this year,” noted WGC. “China’s recovery from the severe 2022 consumption drought goes some way towards explaining this buoyancy, as does the investment motive that helps to drive purchases in high-carat markets including Turkey and India.”

WGC said prospects for the sector for the rest of 2023 are muted, given that prices have remained well supported and consumers across much of the globe face a deteriorating economic picture.