Commodity Buzz: China Gold Jewellery Demand In Q1 Falls 8%, Says WGC

28 Apr 2022 , 04:47 PM

January and February saw upbeat sales for gold jewellery in China, lifted by festival sales ahead of the New Year Holiday; volumes were also boosted by the continued efforts of retailers to promote heavier gold products, according to latest Gold Demand Trends from the World Gold Council (WGC). After a promising start to the year, Chinese gold jewellery demand in the first quarter fell 8% to 178t. The sharp rise in the gold price in late February following the outbreak of war in Ukraine impacted demand. As strict lockdowns were imposed in March across key cities such as Shanghai and Shenzhen, demand all but halted.

Looking ahead, the prospects for the second quarter are fairly ominous. The usual seasonal Q2 decline is likely to be exaggerated by the negative impact on jewellery demand of continued lockdown restrictions, as well as by Chinas economic slowdown. Despite risks to economic growth and higher prices, WGC expect jewellery demand to be flat y-o-y in 2022. Ongoing widespread recovery from COVID-19 lockdowns in 2020-21 will be supportive, but the impact of renewed restrictions in China on Q1 demand add to the downside risk to our expectations for the full year. Globally, continued price strength and a worsening economic environment are likely to restrict the ability for demand to recover to historical average levels.

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