Gold jewellery demand in the third quarter of the year hit its lowest level since 2010 as prices of gold continued to rise, according to the World Gold Council (WGC).

Citing results of its Gold Demand Trends Q3 2019, the council said demand for gold jewellery was down 16 percent to 460.9 tonnes as the quarterly average price of gold reached US$1,472.47, up 21 percent year on year. 

“This price pressure was exacerbated by concerns over the health of the global economy, which encouraged many consumers to moderate their buying plans. Bright spots were few and far between, with most markets seeing significant year-on-year declines, particularly in Asia and the Middle East,” noted the council.

Jewellery demand in India dropped by 32 percent to 101.6 tonnes as consumer confidence fell over concerns around a weakening economy. The absence of any festivals during the quarter in review as well as a 12.5 percent increase in custom duties also dented demand. 

Wedding-related purchases somehow provided support but sales volumes were 15 percent to 20 percent lower compared to last year owing to higher prices, revealed WGC. 

Demand for gold jewellery in China meanwhile slid 12 percent to 156.3 tonnes, marking the fourth consecutive quarter of year-on-year declines. The figure is also 10 percent below the five-year quarterly average of 173.5 tonnes. 

According to WGC, consumers spent their money elsewhere due to concerns over the Chinese economy as well as rising inflation in prices of staple goods. 

Plain and mass-appeal 24-karat gold jewellery saw a double-digit fall but retailers recorded growth in sales of 3D hard gold, 5G gold and other innovative products with lightweight and fashionable designs since these appeal to younger consumers. 

“Talks with our trade partners in the industry indicate that lighter, more aesthetic products are growing in popularity – consequently, these products are expected to take a larger share of the market in the longer run,” continued WGC.

The council also highlighted the fading relevance of the golden week holiday as a shopping occasion over the years with consumers, especially the younger generation, preferring to spend their money on experiential purchases. 

Bucking the trend, the US saw a 1 percent increase in gold jewellery demand to 28.5 tonnes. “While this is the eleventh consecutive quarter of growth, it was at a slower pace than in Q2 (+3 percent). Consumer confidence in the economy remained upbeat during the quarter, helping to support sales, but deteriorated slightly compared to the first half of the year. Demand was also hampered by the substantial rise in gold price during Q3,” said WGC.