Gold Demand up Sharply as Jewelry Sales Jump

Worldwide demand for gold in the first quarter increased by 26 percent in tonnage terms, fuelled by a 19 percent rise in jewelry sales and higher sales of gold bars and gold-backed investment instruments, the World Gold Council said in a report.

The WGC attributed the rise in gold demand to successful jewelry promotion campaigns, the offering of new gold-backed investment products, and continuing geo-political and economic concerns which fuelled investment in gold.

Since the increase in sales of gold jewelry took place when the average price of gold was $427.35 per troy ounce, five percent higher than a year earlier, this was a sign that the gold market had become used to a price higher than $400, the WGC said.

Demand for gold totaled 977 tons in the first quarter, a 26 percent increase on the same quarter of last year. In dollar terms, gold sales were 32 percent higher.

Jewelry demand jumped 19 percent to 688 tons, an increase of 25 percent in dollar terms, and accounted for 70 percent of gold sales in the quarter, a rise on last year’s average.

Apart from Europe and Japan, all countries saw a rise in the first quarter in jewelry consumption, the WGC said.

Gold was selling at around $419 per troy ounce yesterday (Wednesday).