Global gold jewellery consumption was down 2 per cent in the first quarter of 2024, owing to a sustained uptick in gold prices beginning March, latest data from the World Gold Council (WGC) revealed.

First-quarter demand of 479 tonnes was slightly lower compared to 488.9t in Q1 2023, with two of the world’s top gold jewellery consumers – India and China – registering mixed results. WGC’s Gold Demand Trends for Q1 showed a 6 per cent decline in China’s gold jewellery consumption to 184.2t from 195.6t year on year due to gold price hikes and a post-Chinese New Year lull while India saw a 4 per cent increase to 95.5t from 91.9t the year prior, supported by a sturdy macroeconomic environment.

Gold jewellery demand was initially aided by a mild gold price correction in January and February this year, but demand pulled back as prices skyrocketed in March.

WGC data showed prices of gold reaching US$2,011.75 per ounce in mid-January and dropping to a year-to-date low of US$1,985.10/oz in mid-February. Prices then climbed to US$2,192.7/oz in end-March and reached a year-to-date high of US$2,401.5/oz as of April 12.

Despite demonstrating a year-on-year decline, Q1 2024 demand is around 3 per cent above the first quarter average from the past five years of 465t, data further showed.

“While gold jewellery volumes were slightly lower than Q1 2023, the value of demand confirms that consumers were far from reluctant to spend on gold jewellery even as prices shot up,” remarked WGC.

Relatively stable prices of gold in the first two months of the year boosted demand during that period, with a significant drop taking place in mid-February and coinciding with Chinese New Year celebrations. This was "well-timed" to attract jewellery consumers in Asian markets up until March when demand collapsed on higher gold prices, according to WGC.

The council expects jewellery demand to remain under pressure in Q2 on the back of unprecedented price levels. "Although buying will likely be encouraged by any price pullbacks, we expect a subdued year-on-year comparison," it added.

Jewellers, meanwhile, are attesting to the resurgence of yellow gold as the precious metal of choice by modern buyers. According to Pierpaolo Cervetti of Italian jeweller Giloro, yellow gold has been enjoying steady demand amid soaring prices. 

Buyers gravitate towards yellow gold owing to its reputation as a premium material, he noted.

Sisouk Saysanasy, marketing director of jewellery manufacturer AJ Group International, agreed, adding that yellow gold is rising in popularity, especially in China. AJ Group has offices in Hong Kong and China. 

“This is reflected in the orders that we receive, which is predominantly from the Chinese market,” noted Saysanasy. “China is mainly interested in 24-karat gold, including innovative products such as 3D hard and 5G gold.” 

The jeweller used to sell 18-karat, 22-karat and 21-karat gold in China but demand for these has been lacklustre of late. AJ Group’s inventory of 14-karat, 18-karat, 21-karat and 22-karat gold jewellery are largely exported to Dubai instead, the company official stated.