29 October, 2020

Jewellery demand remained in the doldrums in Q3, thwarted by the unprecedented global environment and historical high gold prices.

  • Global jewellery demand – at 333t – registered its third lowest quarterly total in our data series back to Q1 2000
  • The record high gold prices reached in August deterred consumers 
  • However, demand improved from the Q2 record low, as most markets saw at least some relaxation in the strictest lockdown measures, and some witnessed a notable shift towards online shopping. 
Tonnes Q3'19 Q3'20   YoY
World total 468.1 333.0 -29%
India 101.6 52.8 -48%
China, P.R.:Mainland 158.1 119.1 -25%

The continued impact of the ongoing global pandemic at a time when gold prices reached a new record high had unsurprisingly negative implications for gold jewellery demand. Global demand was 29% below an already relatively anaemic Q3 2019. In value terms, the comparison was less stark, as the strong rise in the price offset the lower volumes: Q3 jewellery demand was worth US$20.4bn, down 8% y-o-y.  

Jewellery demand for the y-t-d totals just 904t, the weakest in our data series by some margin. This is 30% weaker than the equivalent period of 2009 – the next lowest Q1-Q3 total and the time of the Global Financial Crisis (GFC) – when demand reached 1291.7t. 

Although Q3 saw widespread recovery from the depths of the Q2 weakness, economies around the globe remained under the shadow of COVID-19 and this is reflected in the y-o-y figures for jewellery demand. The strong rally in the gold price – which reached record levels in almost all key currencies – further magnified the effect. Between January and end-September, the US-dollar gold price had increased by 25%.  

While China and India were major contributors to the global weakness (by virtue of their significance to the market), weakness was virtually universal, with no bright spots of note.  


Q1-Q3 jewellery demand falls below 1,000 tonnes

Q1-Q3 jewellery demand falls below 1,000 tonnes

Data as of

Sources: ICE Benchmark Administration, Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer

Note: Bars represent year-to-date demand for each corresponding year



As China continued to return to post-lockdown normality in Q3, jewellery demand recovered further from its Q1 lows but remained very soft compared with 2019. China saw 119.1t of gold jewellery demand in Q3, a 31% rebound from the previous quarter as the domestic economy continued to recover. The significant 25% y-o-y decline in Q3 was nonetheless considerably narrower than the 52% drop in H1 demand. Y-t-d demand in China totals 271t, 43% below the same period in 2019.

While the rallying gold price discouraged consumers from buying gold jewellery in July, the 10% pullback in the price from the August peak helped lift demand for the remainder of the quarter. 

The quarterly recovery was further helped by bridal demand, as many couples postponed their weddings to Q3 and Q4 due to the COVID situation. Weddings that been due to take place earlier in the year were rescheduled as China eased restrictions and began to return to normal. This helped support demand in Q3; both gold withdrawals from the Shanghai Gold Exchange (SGE) in September and conversations we had with our trade partners in the industry indicate that Chinese jewellery retailers were actively stocking up for the anticipated wedding gold jewellery sales boom. We expect this trend to develop further in Q4, having started on a positive note. According to a report by – one of the largest online shopping platforms in China – their big data system showed a 129% y-o-y surge in September sales of wedding-related products, ahead of the October Golden Week holiday which was packed with postponed wedding ceremonies due to the COVID-19 pandemic.1

Innovations have caught many young consumers’ attention. Recognising the emerging trend of “China Fashion” among young consumers, jewellers increased their efforts to promote products such as 3D/5D hard gold and enamel-coated heritage gold, both of which offer more stylish, lighter-weight designs at more affordable prices. Meanwhile, demand for rhodium-plated black hard 24K gold jewellery – less conventionally styled items designed to appeal to young consumers – rose markedly. As stated in our recently published consumer research report, one of the main barriers preventing young Chinese consumers from purchasing gold jewellery is the lack of styles that appeal. Creating innovative products with different stylish designs could help remove this barrier.

Gifting on Chinese Valentine’s day (14 August) was, however, reasonably lacklustre in terms of gold volumes, as popular products were typically light weight; a reflection of the very high gold prices that were prevalent at the time. Some retailers focused their promotional activities on gem-set pieces in the belief that it would take some time before consumers accepted the higher gold price. 

Consolidation of the Chinese jewellery retail sector gathered pace in Q3, especially in regions where the impact of COVID-19 on consumer sentiment was severe. National brands were far more resilient in terms of their quarterly performance: Chow Tai Fook and Luk Fook, for example, reported net openings of 261 and 58 stores, respectively.2


Indian jewellery demand staged a modest recovery from its Q2 record low but remained well below 2019 levels. Demand was 48% lower y-o-y at just 52.8t – the third lowest quarter for Indian jewellery demand in our data series. Not only did Indian consumers have to cope with recurring lockdowns and unprecedented gold prices, but also the inauspicious periods of Pitru-Paksha and Adhik Maas discouraged buying during September (both periods are considered by Hindus to be inauspicious for gold purchases).3

As the local gold price breached Rs50,000/10gm – a major milestone for India – casual/impulsive purchases were curtailed in favour of needs-based buying. The prohibitive price level also encouraged a shift to lighter-weight plain gold pieces. 

Despite the positive monsoon season, consumer confidence remains heavily impacted by the economic impact of the measures imposed to contain the pandemic. India’s GDP contracted by a whopping 23.9% in Q2 2020 and is expected to contract by 12.7% in Q3.4 Weak consumer sentiment was also reflected in the Reserve Bank of India’s consumer confidence survey, which showed the Consumer Confidence Index falling in September 2020 to an historic low of 49.9 from 53.8 in July.5

Nonetheless, the weak picture for jewellery demand has not translated into a surge of selling by Indian consumers. Instead, there has been an increasing focus on the use of gold as collateral for loans. Our forthcoming Market Update will explore in more detail the growth of this area of the market. 

Middle East and Turkey

Turkey saw a 22% y-o-y fall in Q3 jewellery demand, to 6.5t. While this was a strong rebound from the record 4t low seen in Q2, it is still the second-lowest quarter for Turkey in our data series. Although July saw some easing of restrictions around wedding ceremonies – leading to a small uptick in demand – the record lira price in August quashed the recovery.

Demand was similarly weak across Middle Eastern markets, where weak energy prices and the outflow of Indian expats added to the damaging combination of collapsing tourism and historically high gold prices. Regional demand was down 27% y-o-y to 26.6t. Iran and the UAE led the downturn, with losses of 34% and 30% respectively. In Saudi Arabia, meanwhile, an increase in VAT on jewellery from 5% to 15% as of 1 July was an additional obstacle to demand: it fell 24% y-o-y to 7.2t.6


Q3 saw widespread recovery from coronavirus-stricken Q2

Q3 saw widespread recovery from coronavirus-stricken Q2

Data as of

Sources: Metals Focus, World Gold Council; Disclaimer


The West

The US market was relatively resilient compared with the global picture, posting a modest 3% y-o-y decline in Q3. Compared with the average of the previous five years, y-t-d demand of 71t is 8% lower. While in-store demand remained anaemic in Q3 as consumers stayed away from shops and malls, online sales took up much of the slack. 

Nevertheless, the market remains subdued, particularly as lower income groups – where demand for plain gold basic items are prominent – are suffering more from the effects of the pandemic. While engagement rings have been relatively unaffected by the downturn, demand for wedding bands has reportedly been undermined by the postponement of weddings.

It should be noted that US demand figures could be subject to greater than normal revisions going forward, due to varying levels of uncertainty in the data from different sources amid COVID-19 disruption.

At 10.3t, jewellery demand across Europe was 17% weaker y-o-y in Q3, although a solid 32% quarterly improvement reflected a release of pent up demand as Q2 lockdowns eased. Collapsing tourism impacted demand in southern Europe particularly, as did widespread delays to baptisms, first communions and wedding ceremonies.

Other Asia

The smaller Asian markets all saw a quarterly recovery in jewellery demand from the extreme weakness of H1. But almost all experienced large double-digit y-o-y declines and demand remained tentative amid fears of a second wave of infection. 

Losses were most extreme in Thailand, Indonesia, and Vietnam – all of which saw demand halved from Q3 2019. Thailand’s economy remains deeply affected by the virtual halt in tourism since February. Jewellery demand of just 1.4t was reminiscent of the levels seen back in 2009-2011 in the aftermath of the GFC and when the gold price was reaching then-record levels. And, in line with what we have seen in Thailand’s bar and coin market, gold jewellery recycling has spiked sharply over the last two quarters, reflecting the economic stress among the middle- and lower-income sections of the population. Vietnam was similarly weak, but the performance of large jewellery retailers far outperformed that of small- and medium-sized operations. 

Japan was again relatively resilient, posting a y-o-y decline of just 5% in Q3. This relatively strong performance continues to be attributable to the prevalence of demand for plain, high-karat jewellery with a heavy investment focus. But bridal sales were healthy too, as postponed weddings took place.

Important disclaimers and disclosures [+]Important disclaimers and disclosures [-]