The WGC Gold Demand Trends Full Year 2016 report showed that demand for gold jewellery fell to a seven-year low of 2,042 tonnes in 2016.
According to the report, the result was attributed to rising gold prices for much of the year – the price increased 8 per cent – as well as sluggishness in the two largest markets, India and China.
India’s annual jewellery demand decreased 22 per cent to 662.3 tonnes, with the study noting that this represented the country’s biggest yearly decline since the WGC began documenting such figures in 2009.
Several reasons for the negative result were outlined, including the price rise, a jewellers’ strike in the first quarter and the government’s decision in November to withdraw high-denomination rupee notes.
A spike in gold prices, coupled with disappointing sales during the festive period in the fourth quarter, led to China’s dampened jewellery demand. The market recorded a 17 percent fall to 753.4 tonnes.
Both regions accounted for approximately 80 per cent of the overall decline in gold demand.
Conversely, Japan was the only country in Asia where jewellery demand increased, recording a 2 per cent rise on the previous year.
Global challenges
It was also noted in the report that the ‘mild upward trend’ in US jewellery consumption halted in 2016, with demand slipping 1 per cent to 118.3 tonnes in the second half of the year.
Jewellery demand in France decreased 4 per cent and the UK reported a 3 per cent drop in annual demand.
The result in Vietnam was fairly stable, falling slightly from 15.6 tonnes in 2015 to 15.4 tonnes in 2016.
Turkey recorded a low of 40 tonnes; meanwhile the UAE reported a 19-year low of 43 tonnes.
Jewellery accounted for 47 per cent of total global gold demand in 2016, which was said to have reached a three-year high of 4,309 tonnes.
In addition to jewellery, the report analysed other factors impacting total global gold demand. These factors included investment, central banks, supply and technology. No specific mention of gold jewellery demand in Australia was made.
Click here to download the full report.
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