Gold jewellery demand in the third quarter (Q3) of 2016 fell 21% on the same period last year to 492 tonnes (t), according to latest figures from the World Gold Council (WGC).
This was the largest decline since the second quarter of 2014 and the lowest third quarter for jewellery demand since 2011. It comes at a time when average gold prices were some 28% higher than recent levels.
Jewellery demand for the year to date is 18% down on the same period in 2015, from 1,732.7t last year to 1,423.6t – the lowest Q1 to Q3 total since 2009.
High prices were the key reason for continued weakness in the jewellery sector, and, barring just three or four “very minor” exceptions, jewellery demand fell in every consumer market that the WGC tracks.
Looking ahead to the fourth quarter, the WGC said, having started on a stronger footing, there should be a recovery in the jewellery sector and a October drop in the price of gold was “fortuitously timed”.
The approach of key buying occasions, such as the festival and wedding season in India; the main holiday season in Western markets; and the Chinese New Year is expected to make consumers in these markets more alert to lower prices.
However the WGC said it does not expect a “clear revival”, with the consumer environment in European markets remaining “hesitant”.