Gold jewellery manufacturing was down 3 percent in the first six months of the year as macroeconomic difficulties continue to depress demand, according to Refinitiv's latest gold survey.
All major regions recorded losses, except South America, with gold demand from the jewellery sector in China falling by 4.7 percent as uncertainties put pressure on consumer spending, results of the GFMS Gold Survey 2019 H1 update and outlook showed.
The figure was partially offset by a 2 percent rise in Indian jewellery demand. Jewellery demand in Europe meanwhile saw the steepest decline of 13 percent as long-term structural factors, along with lacklustre economic growth and higher gold prices, weighed on consumption.
China’s jewellery consumption dropped 14.5 percent during the same period, according to the study. “Chinese retail consumption in general (not just within the jewellery segment) has deteriorated rapidly in the last nine months, and it has certainly affected the consumption of gold jewellery,” it further noted.
Refinitiv attributed weak consumer sentiment to a slowdown in domestic economy and manufacturing activities, rising unemployment rate and the US-China trade dispute. Production volume however managed to stay at relatively high levels compared to consumption as manufacturers effectively expanded product lines, including 3D hard gold and the new 5G gold.
In India, jewellery consumption was up 12 percent while investment demand rose 5 percent mainly due to strong bridal jewellery demand and heavy purchases during festivals.
Jewellery consumption in the US meanwhile slowed in H1 2019, following a year of continuous increases in 2018. “Following a prolonged period of growth, the jewellery industry in the US is finally showing signs of slowing. In fact, industry sales growth switched from positive in December 2018 to negative in January 2019 and has continued that trend year to date,” the survey said.