Global Gold Jewelry demand Fell 30% While Sales in the US and UK Improve

Yellow and white gold bracelets by Italian jewelry brand, Antonini. There was increase in Italian gold jewelry exports for the second quarter of 2014. 

Plummeting gold jewelry sales in India and China led to a 30 percent year-over-year drop in gold jewelry demand for the second quarter of 2014, the World Gold Council said Thursday. The loss was slightly offset by increases in consumer demand in the US and UK. 

Gold jewelry demand fell to 509.6 tons in the second quarter of 2014 compared with 726.7 tons in the same period of 2012, the WGC said in its quarterly report, “Gold Demand Trends.” Officials for the gold industry market development organization said the decline was expected due to the strength of 2013 demand and a natural annual weak period for such demand. In addition, the organization (which also tracks gold demand in investment, among central banks and for technology uses) notes that jewelry demand historically has accounted for more than half of global gold demand and the second quarter of 2014 was no different at 53 percent. 

“In what is traditionally a quiet quarter for gold jewelry demand, Q2 2014, was unsurprisingly lower,” said Marcus Grubb, WGC managing director of Investment Strategy, said in a video addressing the report. “However, jewelry has been extending its broad upward trend from the base established in the depths of the financial crisis in early 2009.”

Nearly all Asian and Middle-Eastern countries experienced double digit declines in demand, while western markets either remained flat or fared better, according to the report. The exception is Italy, where consumer demand was down 8 percent. However, the country, known as a gold jewelry manufacturing hub, saw gold jewelry exports improve due to increased demand in the US and other key markets.

This decline in gold jewelry demand helped to influence a 16 percent drop in overall gold demand (investment, central banks and technology) to 963.8 tons, which the WGC described as “not surprising … given the stark contrast in conditions in the global gold market between the two time periods.” 

Grubb added, “Global gold market continues to recalibrate in 2014 following an exceptional 2013 for gold buying.” 

By country, China was the market most affected by the comparison with the second quarter of 2013, WGC said. Gold jewelry demand fell 45 percent to 143.4 tons. Hong Kong also experienced a similar decline (52 percent to 9.1 tons) due to a drop in mainland China consumers.

“The second quarter began as the first had ended, with consumers adopting a more cautious, considered and ‘occasion driven’ approach to gold jewelry buying,” according to the report. 

Grubb added, “Price sensitive consumers … held back from purchasing more due to uncertainty around the future direction of the gold price and the fact that purchases have been made in 2013 instead.” 

In India, jewelry demand fell by 18 percent to 154.5 tons. The WGC said holiday and wedding purchases remained steady but the drop was primarily because of the recent general election that culminated in the victory of Narendra Damodardas Modi who took office as India’s 15th prime minister in May. High value purchases were restricted by the previous government in the run up to the election, the WGC explained. Now consumers are waiting to see whether Modi will remove those restrictions.

“Consumers held back from buying on the expectation that restrictions on gold would be relaxed by the new government,” Grubb said. “No substantial changes have been made by the Indian government to date.”

In the Middle East gold demand saw a 25 percent decline to 47 tons. The WGC says the escalation of violence in Iraq had a “deleterious impact” on demand across the region. In addition, demand slowed ahead of Ramadan. “Nevertheless, the region as a whole remains relatively healthy, particularly as non-resident Indians provide a steady source of demand for the 22k segment.” 

While the east and Middle East markets are in decline, western markets are continuing to rebound from the 2008-09 recession, with the most notable increases in the US and UK. 

Gold jewelry demand in the US for the second quarter increased 15 percent to 26.1 tons as the country is taking in more imports from India, China and Italy. It was the country’s fifth consecutive quarter of year-over-year growth. In the UK, demand increased 21 percent to 3.6 tons. 

Gold jewelry demand in other key markets is as follows:

* In Turkey, demand fell 20 percent year-over-year due to a clampdown on credit card purchases and ongoing political turmoil, WGC said. The lower end market took the brunt of the decline while larger, more established brands were “relatively resilient.” 

* Thailand experienced a 60 percent decline in demand due to recent political instability and high comparisons to the second quarter of 2013, the WGC said.

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Montblanc Presents Arts Patronage Award to Jane Rosenthal of Tribeca Enterprises

Jane Rosenthal Photo credit: Anthony DeMarco

Artists once depended on royalty to support their work, then it became the responsibility of governments. However, in today’s world kingdoms are few and governments are facing monumental challenges so its role is greatly reduced. This function now falls on the shoulders of private institutions and their wealthy counterparts. Since 1922, Montblanc has been honoring those who go out of their way to support artists and their creations through the Montblanc Culture Arts Patronage Award.   

“When you give an award for an artist, which is important, then you honor this artist. But you are not providing the basics for many other artists to develop because when you think about young artists what they miss the most is money. What they miss the most is the opportunity to concentrate on perfecting their skills,” said Lutz Bethge, vice chairman of the Montblanc Cultural Foundation. “This is why patronage is so important. In the past it was done by the emperors, the kings, the church and so on. They are all gone and government funds are limited so it is up to committed individuals and successful corporations to do the job.”

It even comes upon those who don't consider themselves patrons. This brings us to Jane Rosenthal. The television and movie producer is now most associated with co-founding, with her more famous partner Robert De Niro, what has grown to become Tribeca Enterprises, which she serves as CEO. The organization in the TriBeCa neighborhood of Manhattan combines for-profit and nonprofit ventures that include branded entertainment businesses, the Tribeca Film Festival, Tribeca Film Festival International, Tribeca Cinemas, Tribeca Flashpoint Media Arts Academy, and the distribution label Tribeca Film.

Robert De Niro Photo credit: Anthony DeMarco

The organization under Rosenthal’s leadership has been credited with helping to revitalize the southern Manhattan neighborhood, provide funding for young filmmakers producing independent film projects and promote the arts through community outreach. For this work, Rosenthal was the latest recipient of the Montblanc Culture Arts Patronage Award during a cocktail reception at Stephan Weiss Studio in New York on June 3. It comes with a cash prize and a one-of-a-kind writing instrument, created to honor Henry E. Steinway of the Steinway Piano Company.

“I never realized the word patron applied to me,” Rosenthal said prior to the awards presentation. “It brings the connotation of kings and queens. I’m a kid from Providence, Rhode Island. But it’s so important to support the arts. Its artists who shine a light on the important problems and issues that we have and if there’s any hope, it’s going to be through the work that artists can do to unite us.”

Montblanc presents this award in several countries. Each has its own group of jurors who make the recommendations, which are then approved by all the jurors around the world. This year the American jury was comprised of fashion designer Prabal Gurung, Christopher “Kip” Forbes, vice chairman of Forbes, and actor Anthony Mackie.

Anthony Mackie Photo credit: Anthony DeMarco

“Everybody who was up for the award expressed a huge amount of philanthropy. A huge amount of selflessness,” Mackie said. “I feel like with Jane, her philanthropy stretched far outside her hands’ reach. I’ve known Jane for about seven years and she affected me far before I was able to say hello to her and she knew who I was. I feel like with this organization, Tribeca, she has the ability to reach out and affect kids all over the world, artists all over the world…. You can go anywhere in an artistic community and find someone who not only knows her but has been either helped or affected by her.”

During the presentation, several people spoke to acknowledge Rosenthal's work including De Niro, who presented the Montblanc award to her. He joked that lately she’s been receiving more honors than him. Then he became serious.

“For 25 years Jane has guided me, supported me, bullied me, challenged me and collaborated with me. She has the guts to say no to me and the taste and intelligence to be right when she says it,” he said. “Jane is being honored this evening for being a patron of the arts. It comes so naturally to her because she appreciates what artists do. She says that being an artist is a lonely job, but also an essential one. Artists need incentives and they deserve our support. Jane understands the soul of the artist because she has the soul of the artist.”

The Montblanc Henry E. Steinway writing instrument
awarded to Jane Rosenthal. Photo credit: Anthony DeMarco

In her remarks, Rosenthal thanked Montblanc for recognizing the importance of what artists do and for providing a cash award that will be used for expanding a program at Tribeca.

“Society is defined by its culture and understanding that the creative response becomes the global response,” she said. “Thank you for making your generous donation in euros rather than dollars. They’re not only worth more but I think they’re cooler. With this award money we will fund work for ‘Tribeca Teaches,’ a program that we do here at the Tirbeca Film Institute that’s close to my heart. Our goal is to take the program nationally and internationally so thank you for helping us take another step toward that goal.”

It's clear that the Rosenthal and De Niro are not only partners but friends as she explained how De Niro approached her to take the position and how the job has defined who she is.

“When he offered me the job and I said I’m going to have to think about it, he yelled at me. ‘What? Do you want to be a studio executive for the rest of your life?’ That was the first time I ever thought that the words ‘studio executive’ was a curse word.”

If it wasn’t for Bob, I wouldn’t be here right now. I’d probably be at name-that-studio making all those silly dollars, living in some mansion in Beverly Hills, flying private, lounging at restaurants. But honestly I wouldn’t trade this for the world.”

She added, “We get asked why we give money to the arts when there are so many desperate problems in the world—famine, war, oppression, poverty. The answer is that the arts nourish us spiritually. When we as a society are spiritually whole, we will not allow famine, we will end war, we will not tolerate oppression and we may eventually eradicate poverty. Maybe we’ll even have peace.”

The Montblanc limited edition Henry E. Steinway 4810 writing instrument.

The Montblanc “Patron of Art” writing instruments is dedicated annually to an historical figure who has promoted the arts and artists. This year it’s Henry E. Steinway. In addition to the one-of-kind edition of the pen that is presented annually to winners in various countries given the Montblanc Culture Arts Patronage Award, limited editions of the writing instrument are released for the general public.

The gold nib of the Montblanc limited edition Henry E. Steinway 4810 writing instrument.

The Henry E. Steinway Limited Edition 4810 in deep black lacquer and gold-plated fittings has a cap decorated with the heart of the piano–the harp. The shape of the gold-plated clip references the once-patented screw clamps used for bending the grand piano rim into its distinctive sweeping curve. The name “Steinway & Sons,” above the keyboard of every piano produced by Steinway, is engraved on the gold-plated cone ring. The gold nib is engraved with a portrait of Henry E. Steinway. The Montblanc emblem in black and white resin crowns the fountain pen.

The Montblanc Henry E. Steinway 888 limited edition writing instrument.

The Henry E. Steinway Limited Edition 888 has a cap adorned with the representation of a piano harp made of gold. The gold nib can be seen through the skeletonized cap. The barrel depicts an octave of piano keys in black and white. The pattern on the cap ring is inspired by the decor of the domed rotunda in the Steinway Hall in New York. The Montblanc emblem is made of mother-of-pearl.

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2013 Gold Jewelry Demand Up 17%

Marco Bicego 18k gold bracelet

Gold jewelry demand in 2013 saw the largest volume increase in 16 years as consumers across the globe reacted to lower gold prices, the World Gold Council said Tuesday. Full year demand was 2,209.5 tons, 17 percent above 2012 levels.

In addition, the fourth quarter of 2013 was the sixth consecutive quarter of year-over-year growth with demand of 553.8 tons, 12 percent above the five-year quarterly average, the WGC said in its market report, Gold Demand Trends: Full year 2013 Review. Jewelry consumption saw continuous growth throughout 2013, with the bulk of the increase coming in the first half of the year due to China and other Asian countries whose consumers responded quickly when the price first dropped. However, even during the second half of the year, the volume of demand continued, increasing by 7 percent year-over-year.

Also in the fourth quarter, the US and the UK generated a combined 14 tons of this growth. “Although the fourth quarter is traditionally strongest in these markets, due to the Christmas effect, these numbers are significant given their size and direction – the first year-on-year increase in Q4 demand in both markets since 2001,” WGC said in its report.

In addition to jewelry, the WGC report measures gold consumption in technology, investment and central bank purchases. The value of overall annual jewelry demand fell 28 percent in 2013 from its record highs a year earlier. However, in terms of jewelry demand, the value fell less than 2 percent, showing its strength in volume terms. 

New gold jewelry consumption records were set in India, China and Turkey in 2013. Even Japan, with its struggling economy recorded the highest value for the precious metal since 2008.  

“A longer term perspective shows that an increasing share of global collective wealth has been allocated to gold jewelry since 2003 (with the exception of 2009, during the worst of
the financial crisis),” the WGC said in its report. “In 2013, gold jewelry value was almost 0.14 percent of global GDP compared with less than 0.08 percent ten years previously. Significantly, jewelry share of global GDP in 2013 was one fifth higher than 1997, which was the
peak year for gold jewelry demand in tonnage.”

The year 2013 was also notable because of the increasing preference for higher-karat jewelry, particularly in China (24k jewelry). “This trend became more entrenched as the year progressed, benefitting from the quasi-investment element to jewelry purchases, particularly as the upsurge in demand in Q2 and Q3 led to a shortage of retail investment products.”

In the US, where the top end segment has been relatively robust, this trend was more noticeable at the lower end of the market, with mass retail brands shifting away from ultra-low carat items to increasing their stock of 14k jewelry.

Fourth Quarter Jewelry Trends
“Fourth quarter jewelry demand across eastern markets was likely tempered by the magnitude of buying in previous quarters, which on account of falling prices, had ‘cannibalized’ a proportion of future demand,” the WGC said. “In addition, expectations that prices had stabilized released the pressure on consumers who no longer felt they had to make purchases immediately to take advantage of lower prices.”

India - Fourth quarter jewelry demand fell 2 percent year-over-year to 150.7 tons. “The second half of the year was considerably weaker than the exceptional first half, equating to a robust full year total for the sector.”

China and Hong Kong – The WGC is calling the fourth quarter a slowdown from the record numbers during the first half of the year (with the exception of December leading to Chinese New Year), but demand still increased 10 percent to 150.7 tons for Mainland China for the period. In Hong Kong the growth was even greater at 17 percent to 7.9 tons.

Other Asian Markets – China’s pattern was replicated across the other Asian and Middle Eastern markets with strong demand during the first half of the year, tapering off in October as the drop in gold prices stabilized with growth in December. Fourth quarter results are as follows: Taiwan up 2 percent; Indonesia, up 28 percent; South Korea down 7 percent; Thailand up 17 percent; and Vietnam up 9 percent. 

Turkey – The gold jewelry manufacturing center also saw a similar pattern of demand but for different reasons, the WGC said. A strike at the mint between July and September led to a shortage of coins in the market, leading consumers to stock up on gold jewelry. However, once the strike was settled in the fourth quarter consumers went back to gold coins, at the expense of jewelry.

Japan – Its 11 percent growth in the fourth quarter was the exception to the regional trend of strong start and weaker finish to 2013, the WGC said. This was because of encouraging economic news and the anticipation of a sales tax increase from 5 to 8 percent in April, leading consumers to make pre-emptive purchases, where possible, to avoid paying the higher rate.

US and UK – Demand among US and UK consumers led to fourth quarter growth at 21 and 26 percent respectively. As mentioned previously, gold jewelry sales accelerated in the latter months of the year. 

Italy – Demand in this jewelry manufacturing center continued its downward trend falling by 10 percent in the fourth quarter. 

Russia – Jewelry demand reached a five-year high in the fourth quarter (up 6 percent), fueled by continued expansion of the middle class, with growth being concentrated in the second half of the year. 

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Tiffany Q2 Earnings Up 16%, Global Sales Up 4%

Exceptional growth in China along with improvements in operating margins led to a better-than-expected 16 percent net earnings increase to $107 million, or $0.83 per diluted share, in the second quarter for Tiffany & Co.

Worldwide net sales for the New York-based luxury jeweler rose 4 percent to $926 million. On a constant-exchange-rate basis, worldwide net sales rose 8 percent, and comparable store sales rose 5 percent due to sales growth in most regions.

As a result, the company raised its year-end outlook to $3.50-$3.60 per diluted share, from $3.43-$3.53 per diluted share in its first quarter outlook. It also plans to continue its worldwide expansion of stores unabated.

In addition to regional growth, product categories also performed well, according to Tiffany’s second-quarter earnings report released Tuesday. The results were dampened a bit by lower-than-expected sales growth in the US and the drastic decline of the Japanese Yen.

Mark L. Aaron, Tiffany VP-Investor Relations, said in a conference call Tuesday that growth in fine jewelry and statement jewelry were extremely strong and outperformed modest growth in fashion jewelry. He added that diamond jewelry, led by colored diamonds, did well particularly well for the period.

Gross margin (gross profit as a percentage of net sales) increased to 57.5 percent in the second quarter from 56.3 percent a year ago. Aaron said this was the result of diminishing product cost pressure and price increases taken earlier in the year. This help lead to a “better-than-expected” improvement in operating margin.

“We were pleased with the results of our efforts to improve gross margin which, combined with well-controlled expenses, yielded a solid increase in operating margin,” added Michael J. Kowalski, Tiffany chairman and CEO.

Sales by region are as follows:

* In the Americas, total sales increased 2 percent to $444 million in the second quarter. Comparable store sales were unchanged in the quarter, led by growth in Tiffany’s New York flagship store sales. Aaron noted that sales in the US were lower than expected and were mixed throughout the country with no discernible pattern.

* Total sales in the Asia-Pacific region rose 20 percent to $208 million in the second quarter. On a constant-exchange-rate basis, total sales also rose 20 percent and comparable store sales increased 13 percent, “led by especially strong sales growth in Greater China,” the company said in its report.

* Aaron focused a great deal of time on Japan where the company operates 54 stores. The negative translation effect from a substantially weaker yen caused total sales to decline 14 percent to $136 million in the second quarter. However, he noted that on a constant-exchange-rate basis, total sales increased 7 percent in the second quarter, due to comparable store sales growth of 8 percent with strong growth in engagement and higher-end jewelry categories.

* Total sales in Europe rose 11 percent to $111 million in the second quarter. On a constant-exchange-rate basis, total sales rose 10 percent and comparable store sales rose 7 percent due to sales growth in the United Kingdom and most of continental Europe.

* Sales classified as “Other” sales increased 33 percent to $26 million in the second quarter, primarily reflecting the conversion in July 2012 of five Tiffany & Co. stores in the United Arab Emirates from independently-operated to company-operated. The company said it expected to increase its presence in the Middle East.

Tiffany opened three stores in the second quarter, including its ninth in Hong Kong store. Other openings were in, in Verona, Italy and in Villahermosa, Mexico. The company closed a store in Tokyo, due to the mall the store was in closing for long-term renovations, Aaron said.

The company in the second quarter operated 277 stores (116 in the Americas, 67 in Asia-Pacific, 54 in Japan, 35 in Europe and five in the U.A.E.), versus 260 stores (106 in the Americas, 61 in Asia-Pacific, 55 in Japan and 33 in Europe and five in the U.A.E.) a year ago.

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U.S. Sees First Increase in Gold Jewelry Demand in 7 Years

Gold jewelry making a comeback.

Gold jewelry demand in the U.S. for the first quarter of 2013 grew by more than 5% year-over-year to reach a value of $986 million. This is the first increase in demand since the third quarter of 2005, the World Gold Council said Thursday.

The lower-end of the U.S. jewelry market rebounded considerably, the WGC in its quarterly Gold Demand Trends report, adding that it’s “a further positive sign of recovery in the U.S. economy, coinciding with a correction in the gold price over the course of the quarter.”

Meanwhile, the amount of gold used for the fabrication of jewelry worldwide increased by 12% year-over-year to 551 metric tons for the first quarter of 2013, worth a record value of $28.9 billion, according to the report.

The dramatic decline in the value of gold has led to an increase in demand, the WGC said in the report. However, that demand is largely limited to India and China, who continue to distance themselves from the rest of the world in their passion for gold jewelry. The two countries combined now account for 62% of gold jewelry demand, according to the report. The U.S. for the first time in more seven years saw a year-over-year increase in gold jewelry demand.

Other highlights of the report include:

* Gold jewelry demand surged by 19% in China to a record level, led by Chinese New Year gifting in January and a rebound in consumer sentiment, WGC said. This is despite new in leadership in China calling for less conspicuous consumption. Demand saw the largest increase in 24k gold jewelry, although demand for 18k gold jewelry also increased.

* In India, year-over-year demand grew by 15% and came just short of beating the fourth quarter 2012 record. However, that gain was compared a very soft first quarter of 2012.

* Meanwhile, gold jewelry demand in Italy and the U.K. fell dramatically, 12% and 7%, respectively, as difficult economic continues continue to lead consumers to purchase lower-karat gold and silver jewelry.

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Centurion 2013 Emerging Jewelry Designer Winners

“Ivy” earrings by Alessio Boschi with a detachable drop. Left view is with the drop and right view is without the drop. The leaves are diamonds with shaded green tsavorites in dark rhodium. The berries are purple sapphires and the twisted trunks are inertwined diamond lines with dangling chrome diopside. Leaf backs are handmade and invisibly set. Suggested retail price: $16,500.

Three designers from different countries were selected from among a record number of entries as the winners of the Centurion 2013 Emerging Designer Competition. 

The winners—Alessio Boschi of Australia, Erika Bertin of the United States, and Shar-Linn Liew of Thailand—were announced prior to the 2013 Centurion luxury jewelry tradeshow held February 3-5 in Scottsdakes, Ariz. All three designers made their U.S. tradeshow debut at Centurion where they received free exhibition space as part of winning the annual competition, now in its fifth year.

The competition drew almost 70 entries from luxury jewelry designers around the world. More than 300 retailers voted to narrow the field down to 12 finalists; the Centurion Board of Retail Advisors voted again to select the three winners.

Boschi of Lux2Lux Jewels, is a native of Italy who has spent time designing in his home country, Greece and Thailand before moving to Australia to work with pearl jewelry manufacturer, Autore, where he created the popular and critically acclaimed “Oceania,” “Ice and Fire,” and “Venezia” jewelry collections.

Rose gold medallion and ring inspired by a medieval incense diffuser top, and come with handmade double gold chain and white diamonds. Retail prices: Medallion chain, $9,755 for 18k and $5,815 for 10k; Ring, $4,985 for 18k and $2.790 for 10k.

 
Bertin of Alasia (erikabertin@yahoo.com) previously worked as a luxury brand builder in London before becoming a full-time jewelry designer. She moved to New York in 2000 to set up Arte Italiana, the US branch of Favero, as a partner to the owner. Favero jewelry found a responsive audience in the Americas and saw healthy and successful growth, becoming a recognized brand. Many of the Favero pieces distributed in the USA were either designed or merchandised by Bertin.

Sharart Design’s Shinto blue sapphire earrings are fully articulated. Gem content: blue sapphire (8.15ct.) and white diamond (0.71 ct.). Suggest retail price, $9.800.

Jewelry designer Shar-Linn Liew of Sharart Design grew up in Singapore and was exposed to designing as a young girl by her mother, who was a clothes designer. But it was her husband who exposed her to the world of gemstones and fine jewelry. After a two-year stint as a jewelry merchandiser at a TV jewelry network, Liew decided to focus on her own collection. Her pieces are handcrafted by her husband's jewelry manufacturing house. Her inspirations are constantly evolving around the designer’s Asian heritage blended with old European allure. 

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Double-Digit Decline in U.S. Gold Jewelry Demand

The high price of gold continues to have a detrimental impact on the worldwide jewelry market as demand in this sector for the precious metal fell by 6 percent, year-over-year, in the first quarter of 2012, the World Gold Council said Thursday. The value of jewelry demand, meanwhile, grew by 14 percent to $28.3 billion.

Gold jewelry demand was weaker in all but six countries and clearly reflects the year-over-year 22 percent increase in the average gold price of gold to 1,690.57, according to the WGC Gold Demand Trend report for the first quarter of 2012.

In the U.S., demand fell 10 percent to 17.6 tons. In addition to the high price of the precious metal, the report blames high gas prices and cautious consumers. In value terms, gold increased by 10 percent to $958.2 million.

In Italy, demand slid 14 percent to 3.5 tons “as the negative economic environment took its toll,” according to the report. In the U.K., demand dropped 4 percent to 3 tons.

India, the world’s largest consumer of gold and gold jewelry, was largely responsible for the worldwide decline, according to the report. An unexpected substantial increase in the import tax on gold and the introduction of an excise duty on gold jewelry resulted in a three-week countrywide strike among jewelers until the government agreed to end the excise duty. A weaker rupee also added to the decline.

Meanwhile, China dominated the jewelry market as demand increased 8 percent to 156.6 tons in the first quarter. China accounted for 30 percent of all demand for the period, making it the largest gold jewelry market for the third consecutive quarter.

Demand in Russia was also robust with a 28 percent increase in the first quarter to 20.4 tons, attributed partly to stock building among the trade. However, the repot notes that “historically low inflation, GDP growth, improving consumer confidence and real wage gold,” contributed greatly to the gains. “Gold remains the most popular metal of choice among Russian jewelry consumers.”

Overall, global gold demand in the first quarter fell by 5 percent to 1,097.6 tons, the WGC reports. “This decrease was largely to be expected given the introduction of import taxes in India and high gold prices,” the report states. “Demand for the quarter was underpinned by increased demand in China, continued central bank purchasing and inflows into exchange-traded funds.”

Gold demand value for the period increased 16 percent to $59.7 billion. Gold demand includes its use in jewelry, technology, investment and official sector institutions (such as world banks).

“China and India have seen continuing economic growth and whilst China’s economy is expected to slow, it will nonetheless surpass the rates of growth in the West,” said Marcus Grubb, managing director, Investment at the World Gold Council. “As we previously forecast it is likely China will become the largest source of demand for gold in 2012.”