Demand for gold jewellery was almost unchanged in 2023, with China driving a slight uptick in jewellery consumption amid soaring gold prices, the World Gold Council (WGC) said. 

In its Gold Demand Trends 2023, WGC explained that demand was “fractionally higher” in 2023 at 2,093 tonnes compared to 2,089t in 2022 despite record prices of gold. Average gold prices in 2023 reached US$1,940.54 per ounce, up 8 per cent from 2022.

“China was the main engine of growth as demand recovered from a relatively weak 2022, but there were other pockets of growth – most notably in Turkey,” the council said. “Demand in India was impacted by gold price strength, generating a notable tonnage decline year on year.”

Gold jewellery demand in China reached 630.2t in 2023, 10 per cent higher than 570.8t in 2022 on the back of a post-Covid recovery in jewellery sales. Gold also benefited from its increasing appeal to consumers as a store of value. WGC said, “The strong 2023 local gold price performance further underlined this view and gold jewellery was one of the best performing retail categories during the year.”

A rebound in weddings post-pandemic restrictions, meanwhile, contributed to growth in bridal jewellery sales in 2023.

Lighter-weight gold jewellery and items with cheaper unit-total prices, specifically products lighter than 10 grams or cheaper than RMB2,000 (around US$280), were highly preferred and contributed the most to retail sales in 2023. Also popular were lightweight 24-karat hard pure gold jewellery and smaller products, added WGC.

Meanwhile, a “wholesaler to consumer” sales model where consumers purchase gold jewellery products direct from wholesalers to avoiding additional charges is becoming prevalent in China.

Moving forward, gold jewellery demand in China may face challenges in 2024 despite a likely robust performance in the first quarter, bolstered by traditional Chinese New Year sales. High gold prices and a potential slowdown in economic growth could exert pressure on gold jewellery demand, it added.

“Furthermore, 2024 is a less auspicious year for marriages, potentially hurting demand for wedding jewellery. We believe consumers will continue their hunt for products with low labour charges, motivated by value preservation (and) the high gold price,” said WGC.

Meanwhile, gold jewellery demand in Turkey continued its upward trend, having reached an eight-year high of 42t as consumers purchased gold for investment purposes. India, for its part, recorded a 6 per cent decline in jewellery consumption to 562.3t from 600.6t in 2022. WGC noted that stronger prices in 2023 encouraged a trend for lighter-weight or lower-karat items as well as a reduced volume of gold jewellery purchases in India. 

“Indian gold jewellery demand is likely to be subdued in Q1 of 2024 if prevailing price levels are sustained: Retailers are not optimistic for any meaningful return in demand in the absence of a price correction. Moreover, wedding jewellery demand is likely to be tempered given the fewer number of auspicious wedding days in Q1,” WGC said.