Gold jewelry demand continues decline in U.S.
By http://www.nationaljeweler.com
Demand for gold jewelry in the United States fell in the second quarter due to high prices, a weak economy and ongoing competition from silver, the latest data from the World Gold Council (WGC) shows.
According to the WGC’s Gold Demand Trends report, gold jewelry demand in the United States fell 8 percent to 21.7 tons in the second quarter. In value terms, it was up 15 percent to $1.1 billion due to the high price of gold.
The per-ounce price of gold topped off at $1,552.50 in the second quarter, though it has since shattered that record, soaring above $1,900 an ounce. The average price of gold was up 26 percent year-over-year and 9 percent over the first quarter.
“The combination of high unemployment, frail economic growth and stubborn inflation pressures produced an environment that was not favorable for gold jewelry demand (in the United States),” the report stated.
The WGC said that jewelers were pushing more 10-karat gold items in order to make pieces affordable, thereby encroaching on the market share of 14-karat gold jewelry. Gold jewelry also faced competition from sterling silver, with brands including Pandora appealing to the mass market, the report states.
In addition, the rising price of diamonds hurt consumer demand for gold pieces set with the gemstone.
http://www.nationaljeweler.com/nj/diamonds/supply/article_detail?id=27072
Globally, second quarter gold jewelry demand rose 6 percent year-over-year to 442.5 tons, equivalent to $21.4 billion in value terms. Though consumers in some markets, including the United States, shunned gold because of its high price, a number of key markets saw demand increase.
According to the report, India remained the top market in the jewelry sector for gold demand, accounting for 32 percent of the world’s total. Demand in India rose 17 percent year-over-year in volume terms and 44 percent in value terms.
Overall demand for gold was down 17 percent in volume terms but up 5 percent in value terms to 919.8 tons worth $44.5 billion, the second highest quarterly value on record. Healthy growth in demand for gold jewelry and modest growth in the technology sector were offset by a year-over-year decline in investment demand, which was up against strong figures from the second quarter 2010, the report states.
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