U.S. Gold Jewelry Demand Down 6% in Q3
But it was still higher than the five-year average prior to the COVID pandemic, the World Gold Council said in a recent report.
Demand continued to retreat from last year’s “very healthy COVID-rebound levels,” WGC said—at 30 tons, it was 6 percent lower year-over-year and 20 percent down from the previous quarter.
Spending on things like travel and entertainment has gone back to normal, and as such spending on luxury goods like gold jewelry has declined.
Still, the council noted that Q3 demand “compares relatively well” on a longer-term basis—the average Q3 demand for the five years prior to the pandemic was 27 tons.
Looking ahead, an increasingly challenging economic environment indicates Q4 demand won’t match last year’s very strong final quarter in the U.S., WGC predicted.
Gold jewelry demand on a global scale, meanwhile, recovered to pre-COVID levels, with Q3 demand benefitting from a decrease in gold price.
According to the London Bullion Market Association (LBMA), the per-ounce gold price was down 8 percent during the third quarter in response to the strength of the U.S. dollar as the Federal Reserve hiked interest rates to combat inflation.
On its website, LBMA noted gold started Q3 at $1,795.65 but by Sept. 30 had fallen nearly 7 percent to $1,671.75, falling to a low of $1,618.20 along the way on Sept. 28, a level it hadn’t been at since the COVID shutdowns in early 2020.
Global gold jewelry consumption of 523 tons during Q3 was a 10 percent increase year-over-year and a 14 percent increase compared with the prior quarter.
Demand was also healthy when looking at a long-term comparison, with WGC noting global gold jewelry demand in Q3 exceeded its five-year quarterly average of 501 tons.
Year-to-date demand on a global basis reached 1,454 tons, rising 2 percent over the same period in 2021, which the World Gold Council said in its report signals a “continued normalization of the market” to pre-COVID levels of activity, aided again by the lower gold price in many markets during the quarter.
India led the recovery, with a 17 percent year-over-year growth in demand to 146 tons—its strongest Q3 since 2018, WGC said.
Growth in China was more muted by comparison, increasing 5 percent year-over-year as its sporadic restrictions and lockdowns during the pandemic hampered consumer sentiment.
European gold jewelry demand increased 4 percent year-over-year to reach its highest Q3 total since 2010, with demand supported by low unemployment and continued recovery of tourism, while double-digit gains in demand were “widespread” across the Middle East in Q3.
Consumption was also up across Southeast Asia, in Japan, and in Australia, the last of which increased 71 percent year-over-year to 2 tons, though WGC noted that was being compared with a low base in Q3 2021, when there were still fairly severe COVID-19 restrictions in place.
Meanwhile, the total global Q3 gold supply increased by 1 percent year-over-year as lower recycling offset production growth.
Mine production during the quarter was up to almost 950 tons, just 1 percent below the strongest third quarter seen in 2018.
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