Gold jewelry demand may drop through 2022: World Gold Council

A combination of China’s strict Covid Zero policy and struggling real-estate sector likely will cause a slow recovery in demand there, the WGC wrote in its quarterly report. India, another top consumer, also may see lower buying due to the falling rupee and a higher import duty.

Bloomberg

July 28, 2022 / 07:35 IST

Shoppers pass an imitation gold jewelry store at Zaveri Bazaar during the festival of Dhanteras in Mumbai, India, on Tuesday, Nov. 2, 2021. Indians flocked to jewelry stores on the biggest gold-buying day of the year, with a bumper sales period for precious metals that culminates in the festival of Diwali expected for the first time since the pandemic began.

Demand for gold jewelry may slip due to weaker economic growth in the biggest markets, according to the World Gold Council.

A combination of China’s strict Covid Zero policy and struggling real-estate sector likely will cause a slow recovery in demand there, the WGC wrote in its quarterly report. India, another top consumer, also may see lower buying due to the falling rupee and a higher import duty.

Jewelry demand has been weaker after 2021, driven by lockdowns in China and the strengthening dollar, which makes gold bought in local currencies more expensive. Spot prices have slumped since rising near a record following Russia’s invasion of Ukraine.

“As many countries face economic weakness and the cost-of-living crises continue to squeeze spending, consumer driven demand will likely soften, although there should be pockets of strength,” Louise Street, a senior analyst for the council, said in a statement.

More second-quarter figures from the report: