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What’s Hitting Demand For Gold Jewellery?


The demand for gold jewellery in the third quarter for the calendar year 2020, has been disastrous. Not only gold jewellery, it's running across other gold products as well.


What’s Hitting Demand For Gold Jewellery?

The biggest reason for the fall in demand has been on account of the weakness caused by COVID. In the quarter ending Sept 30, 2020, gold jewellery demand across the globe fell 29 per cent, year-on-year to 333 tonnes. While China and India accounted for the largest volume declines, weakness was global.

The big reasons for the fall in gold jewellery demand

Apart from covid, probably an equally bigger reason was the surge in gold prices, which led to demand for jewellery falling.

Louise Street, Market Intelligence at the World Gold Council, said: "The impact of COVID-19 is still being felt in the gold market across the world. The combination of continued social restrictions in many markets, the economic impact of lockdowns, and all-time high gold prices in many currencies proved too much for many jewellery buyers. We believe that this trend will likely continue for the foreseeable future.

"However, looking to the investor landscape we saw further record inflows into gold-backed ETFs in Q3, taking the global total to a record high. It was equally encouraging to see gold's role as a safe-haven for retail investors shine through this quarter, as people continue to seek stability in volatile markets."

Gold demand in India

Q3 2020Q3 2019% fall
52.8 tonnes101.6 tonnes-48.00%

Gold Jewellery demand in India dropped a solid 48 per cent, the World Gold Council report showed.

China and India are the two biggest consumers of gold and any drop in the demand in the two countries, leads to a sharp drop in demand for gold. In fact, India is a big consumer of gold jewellery and there are hopes that the festive season may see a surge in the demand for gold jewellery.


According to the World Gold Council the demand destruction was 30% weaker than the equivalent period of 2009 - the next lowest Q1-Q3 total and the time of the Global Financial Crisis (GFC) - when demand reached 1,291.7 tonnes.

Should there be a meaningful drop in gold prices, after a solid 30 to 35 per cent jump, we could see demand coming back. However, it is unlikely that gold prices would drop sharply.

In fact, with a surge in the corona virus cases across the globe, gold may continue to get support in terms of prices. This means we are unlikely to see demand recovering anytime soon, especially in countries like India, where consumers and investors would be more sensitive to prices.

About the author

Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, commodities, debt, mutual funds and tax planning. Sunil is currently Managing Editor for

Read more about: gold investment jewellery
Story first published: Sunday, November 1, 2020, 11:00 [IST]
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