The volume of gold jewellery purchased by global consumers has reportedly increased by 477.4 tonnes (t) year-on-year for Q1 2021, representing an annual rise in value of 52%.
According to the World Gold Council (WGC), the increase in demand can be attributed to a decline in the price of gold following record highs in August 2020.
The trade body’s gold demand trends report found that the price of gold dropped 10% during the first quarter of the year.
While global overall gold demand held steady with the previous quarter at 815t, there was a 23% year-on-year decline in gold-backed exchange-traded funds (ETFs).
However, this decline in ETF demand was reportedly “mitigated” by bar and coin demand, which grew 36% year-on-year.
Louise Street, senior market analyst at the WGC, said: “As countries around the world continue their recoveries, economies have started to cautiously re-open.
“This led to an encouraging return in consumer confidence in Q1, as illustrated by the stellar rise in gold jewellery demand.”
She added: “Conversely, having seen investors take shelter in gold from the initial impacts of Covid-19, Q1 2021 saw a sell-off in the gold price as confidence in economic recovery grew and US interest rates rose sharply.
“Despite this, gold retains its relevance in well-balanced portfolios, especially with a risk of inflation looming.”