Gold jewellery loses shine in UAE, globally in Q1
Gold jewellery demand fell globally in the first quarter of 2020, its lowest level ever, losing shine due to the outbreak of coronavirus as well as higher prices. The yellow metal also lost shine among the UAE consumers during the first-quarter, according to World Gold Council data released on Thursday.
Gold jewellery demand in the UAE plummeted over 11 per cent to 9.5 tonnes in the first-quarter of 2020 as compared to 10.7 tonnes in the same period last year. While overall consumer demand fell to 11.3 tonnes in Q1 this year as against 12.3 tonnes in Q1 last year, a fall of 8.1 per cent.
But bar and coin sales increased as trend shifted towards investing in the safe-haven metal. Their sales grew from 1.6 tonnes to 1.8 tonnes. Jewellery demand in the Middle East was 9 per cent lower year-on-year at 42.9 tonnes. Iran was hit by the virus earlier, and more severely, than most other markets in the region, and this is reflected in the 20 per cent decline in demand to 7.7 tonnes.
The yellow metal was trading at $1,719.6 an announce on Thursday, up by 0.3 per cent. Data showed that the gold price is higher by 30 per cent in the past one month and 13.4 per cent in the past six months.
According to World Gold Council, the pandemic slashed jewellery demand as governments across the globe imposed lockdown measures. Demand fell to lowest on record, led by a 65 per cent decline in China - the largest jewellery consumer and the first market to succumb to the outbreak.
"Jewellery consumption plunged in Q1 as local gold prices in various countries rocketed and markets were shuttered in efforts to contain the coronavirus pandemic. Global jewellery demand hit the lowest quarterly total in our series, dropping 39 per cent year-on-year to 325.8 tonnes. This is 42 per cent below the five-year quarterly average of 558.1 tonnes. The value of global demand sank 26 per cent year-on-year to a 10-year low of $16.6 billion, in spite of a quarterly average gold price of $1,582.8 an ounce," it said.
In India, jewellery demand fell 41 per cent to an eleven-year low of 73.9t as Covid-19 compounded the impact of higher domestic gold prices amid a depreciating currency and softer economic growth.
"Although the wedding season lifted demand early in the quarter, a sharp increase in local gold prices from mid-February led to a slowdown in demand as consumers held back on purchases. Later in the quarter the market suffered as the lockdown took effect: demand in March slumped by between 60-80," said World Gold Council.
The average price in the first-quarter was Rs41,124 for 10 grams, 26.6 per cent higher y-o-y. The local gold price continued its upward trajectory in Q1 2020 and breached previous historical highs.A weaker rupee, combined with a rising dollar gold price, resulted in the local gold price closing at an all-time high of Rs44,315 per 10 grams in March, it said.