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We know that Egyptian pharaohs were buried wearing gold and the extremely wealthy in Ancient Rome donned it, too. While many people look at gold as a safe-haven investment, gold jewelry remains a very important part of several cultures, often for reasons tied to its value as an investment.
In fact, jewelry represents the greatest demand for gold, followed by retail investment (bars and coins), the economic needs of governments (gold reserves), and industrial fabrication.
Key Takeaways
- Gold consumption for jewelry by China and India is far greater than that of other countries.
- Jewelry-related gold demand in many countries is driven by traditions, such as wedding rituals.
- Consumption across the major gold jewelry consuming-countries fell in the fourth quarter of 2019.
- 2022 demand for gold reached an 11-year high of 4,741 tonnes.
Gold Jewelry Consumption Q4 2019
Below are the 10 countries that had the highest gold jewelry consumption in the fourth quarter of 2019.
| Rank | Country | Tonnes |
|---|---|---|
| 1 | India | 136.6 |
| 2 | China | 132.1 |
| 3 | U.S. | 34.8 |
| 4 | UAE | 11.5 |
| 5 | Indonesia | 10.7 |
| 6 | United Kingdom | 10.3 |
| 7 | Russia | 9.1 |
| 8 | South Korea | 8.8 |
| 9 | Iran | 8.2 |
| 10 | Italy | 8.1 |
Source: GFMS Gold Survey 2019 H2 Update & Outlook
India and China retained the top two spots when it came to buying gold jewelry, according to figures published in the latest available GFMS Gold Survey report. Jewelry consumption worldwide accounted for almost 46% of the total gold demand for the fourth quarter of 2019.
India and China accounted for 57% of gold jewelry consumption globally. Jewelry demand from China alone accounted for more than a third of global demand.
Going forward from 2019, many major countries expected to see declines in gold jewelry consumption due to elevated prices.
Gold Jewelry Consumption in 2022
Mirroring 2019's rankings, India and China again topped the jewelry consumption list in 2022, this time with an annual demand of 600 tonnes and 571 tonnes, respectively. The U.S. ranked fourth with a full-year demand of 144 tonnes.
The World Gold Council, a market development organization backed by the gold industry, found that for 2022, demand for gold reached an 11-year high of 4,471 tonnes. Demand in this particular time period was driven by central bank and retail investor purchases. Jewelry consumption declined somewhat to 2,086 tonnes, mostly due to the powerful rise in the price of gold in the fourth quarter.
More About the Top Two
India
India is the global leader in gold jewelry consumption, where marriages and social occasions are the main reasons for purchases. The country imported a total of 134.8 tonnes of gold in Q4 2019.
Jewelry consumption in India fell by 32% year-over-year in the second half of 2019, due primarily to the rising cost of gold and a decrease in seasonal demand. In fact, a quarter of the gold jewelry demand for the period was met by the exchange of old jewelry.
China
China was a close second in gold jewelry consumption. Jewelry-related gold demand from China fell in 2019. Full-year 2019 tonnes demanded dropped 8.6% to 629 tonnes. In the second half of the year, gold demand fell 9.7% year-over-year.
While the jewelry industry represented more than 65% of the gold consumption, a decline in consumer spending led to a pullback in demand for gold jewelry.
Although the U.S. was third out of the ten countries with the greatest demand for gold jewelry in Q4 2019, it ran well behind India and China. U.S. consumption slowed due to rising gold prices.
About Germany
Germany was the fifth largest consumer of jewelry gold in Europe, behind Turkey. The country consumed 5.4 tonnes in the fourth quarter of 2019. However, given the period's rising prices and economic slowdown, gold demand fell year-over-year for the country. Another reason for the decline was the shift away from high-end jewelry toward technology and experience purchases.
What Market Share of Gold Jewelry Consumption Did India and China Have in 2021?
For 2021, gold jewelry consumption by India and China amounted to 60.53% of the global jewelry market. That represented a 31.77% market share for China and a 28.76% market share for India.
Why Does Gold Have Such Lasting Value?
The value of gold endures because for millennia, people across the globe have believed that it is precious. Beyond that, its value is tied to its beauty and wearability, its utility as a medium of exchange, its long-lasting durability and quality, and its rarity.
What Are Benefits of Gold Jewelry?
One benefit is that, especially when created by a talented jewelry maker, it is beautiful and leaves a lasting impression. In addition, gold jewelry stores financial value and can be exchanged for currency or traded for other items of value, if necessary. Gold jewelry can be beneficial as protection against inflation. It won't lose the purchasing power that currency does when eroded by inflation. For these reasons, gold jewelry can be beneficial to own during times of economic upheavals.
The Bottom Line
Approximately half of all demand for gold comes from jewelers who need to satisfy the buying needs of customers across the globe.
Based on ongoing demand and the lasting appeal of gold, substantial amounts of gold jewelry will most likely continue to be in demand by the countries listed above, even if that demand weakens at times due to rising prices, economic circumstances, or other reasons.
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