New York: Global gold jewellery consumption declined 6.7% year-on-year to 527 tonnes in Q1 2015, its lowest first quarter level since 2012, according to the GFMS Metals Research and Forecasts team at Thomson Reuters. The agency recently released its first Quarterly Update and Outlook 2015 of its annual Gold Survey and attributed the fall in demand to purshases being deferred in ‘price sensitive markets’.
The agency reports that India was somewhat of an exception as jewellery demand increased 2.0% year-on-year to 148.5 tonnes in Q1 2015. However, it clarified that jewellery demand was hindered by heavy rains in the first quarter and investment demand slumped by 31% to its weakest level since 2009.
Despite this, gross imports into the country surged in Q1 2015, increasing to 216.2 tonnes against 115.5 tonnes in Q1 2014, a year-on-year increase of 87.2%, the report said.
In China, the growth in the stock market resulted in substantially lower gold purchases. Retail investment fell by 10.5% year-on-year, to 55.9 tonnes, its weakest first quarter level since 2010.
Jewellery purchases also declined by 12.4% year on-year to 190.9 tonnes, as 24k jewellery purchases, where investment is also a motive fell. The report says that, 18k jewellery performed better, with Q1 2015 growth of about 20-30% year-on-year.
In the US, physical gold demand was38.0 tonnes in the first quarter, a 6% decline from the comparative period of 2014 and the lowest level during a first quarter since 2007.
The fall was led by a 13% decline in retail investment demand, which accounted for 31% of total US demand in the quarter. Meanwhile, jewellery consumption declined 8.4% year-on-year in the quarter. This trend is expected to reverse as the year progresses and the impact of bad winter weather in Q1 alleviates, the report noted.
The consultancy also reiterated its earlier assessment of an annual average price forecast of $1,170/ounce. Further, it said that in the short term the price remains under some pressure, but declines towards $1,100 will be possibly limited by a rise in demand. The report states that the market has already factored in an expected rate hike in the US. Thus any announcement will “remove a degree of uncertainty from the markets” and is “likely to trigger the start of a secular, but gentle, bull run in the gold price as investors implement fresh strategies, aided by improving gold market fundamentals”, it concluded.
