Data released by the World Gold Council on Wednesday reveals a significant shift in the global gold jewellery market, as China surpasses India to become the top consumer in 2023. This change is attributed to a surge in gold prices that adversely affected domestic consumption.
In 2022, India held the lead with a gold jewellery demand of 600.56 tonnes, surpassing China’s demand of 570.8 tonnes. However, in 2023, China’s consumption surged to 630 tonnes, outpacing India, which experienced a decline in consumption to 562.3 tonnes.
Despite the gold price setting new records, the WGC noted that global annual gold jewellery consumption remained relatively stable in 2023. China emerged as a major driver of growth, rebounding from a comparatively weak performance in 2022, with other pockets of growth observed, particularly in Turkey. The report attributes the decline in demand in India to the strength of gold prices, leading to a notable year-on-year tonnage decline.
Also Read : Nova Agritech IPO Allotment Unleashes Investor Frenzy! Check Your Luck NOW – 109x Demand Explodes!
Gold prices in India witnessed a significant uptrend, rising from ₹43,000 per 10 grams to ₹55,000 between November 2022 and November 2023. This increase adversely impacted consumer demand, prompting a shift towards lower-carat jewellery. As of today, MCX gold for April delivery is trading marginally higher at ₹62,463 per 10 grams.
The WGC reported a 9% year-on-year decline in fourth-quarter demand in India, contributing to an overall 6% year-on-year decline in 2023 demand, reaching 562 tonnes. Higher gold prices led consumers to prefer lightweight or lower-carat items, with some buyers reducing their purchases. The council highlighted that higher margins on gem-set and 18k jewellery further incentivized this shift.
Also Read : BLS E-Services IPO: Services Launches with Massive Buzz – Your Ticket to Lucrative Returns!
While October’s price correction, coinciding with Navratri, stimulated consumer response and Diwali purchases boosted sales in November, demand dwindled in December as prices resumed an upward trend. The WGC anticipates subdued gold jewellery demand in India for the March quarter if prevailing price levels persist, with retailers expressing skepticism about a meaningful rebound in the absence of a price correction.
In contrast, China’s gold jewellery demand is expected to remain stable, driven by consumers seeking value preservation. However, challenges such as a predicted decrease in wedding numbers, high gold prices, and consumer preference for lightweight products may temper this demand.
Also Read : Hindustan Zinc’s Silver Boom, Semiconductor Dreams, and Red Sea Resilience – Inside Their Mining Mastery!