According to the quarterly Gold Demand Trends report from the World Gold Council, gold demand for jewelry decreased 21% year-over-year to 445.4 metric tons for the first quarter of 2008. This is the lowest quarterly level on record since the early 1990s. In dollar terms, however, it increased 12% to $13.2 billion.
According to the report, over all demand for gold decreased by 15% to 48 tons.
India, the largest market for gold, continued to suffer from the impact of high and volatile prices, according to a recent World Gold Council (WGC) report. Jewelry demand stood at 71 tons for the period, half of its level during the first quarter of 2007.
More positive news came from two of the world’s emerging economies with overall demand for gold in China and Russia rising 15% and 9%, respectively. This was driven by increasing consumer wealth and ease of access to attractive jewelry and retail investment products.
James Burton, CEO of the WGC, stated: "Early indications are that jewelry demand is likely to remain muted during the second quarter, although there has been positive news from the Indian Akshaya Thritiya festival and the Indian and Middle East wedding seasons, which are expected to generate additional purchasing."
The report added that there was a stark contrast in the gold exchange traded fund (ETF) market, where a combination of continuing instability in the equities markets, ongoing fears over the dollar and rising inflation, combined with increased understanding of gold’s investment attributes helped spur demand. Demand for gold ETFs was up 100% for the period at 73 tons, representing $2.2 billion
