Carat278 tonnes: the smallest jewellery quarter since the pandemic
World Gold Council data put second-quarter jewellery demand at 278 tonnes, down 17% and the lowest quarterly volume since the pandemic, while its value rose 14% to $40 billion. Total gold demand held flat at 1,269 tonnes.
§1The lightest quarter since the pandemic.
The jewellery trade bought less gold in the second quarter than in any quarter since the pandemic. The World Gold Council put global jewellery demand at 278 tonnes, down 17% year on year, while the value of that demand rose 14% to $40 billion. The explanation is a single number: the quarter's average London price was $4,506.29 an ounce. At that level the same shop window holds fewer grams, and the same customer goes home with a lighter piece.
Everything else in the quarter held up. Total gold demand was flat at 1,269 tonnes. Bar and coin buying was steady at 307 tonnes, central banks took 289 tonnes in a sharp recovery from a slow first quarter, and exchange-traded funds saw 45 tonnes of outflows as prices came off their highs. Investment stayed, jewellery left, and the first half set a record for the value of gold demand at $380 billion.
§2Investment stayed, jewellery left.
That divergence is the structural story of this cycle. Gold has spent two years being bought as a reserve asset and a hedge. Jewellery is the only demand category in the accounts that has to be paid for out of a household budget rather than a balance sheet. When the price rises, one bid gets stronger and the other gets weaker, and the tonnage line shows exactly which is which.
Jewellery is the only demand category in the accounts that has to be paid for out of a household budget rather than a balance sheet.
§3A price the market has left behind.
There is a second reading in the price the quarter averaged. At $4,506.29, the April to June period was dearer than the market is now: gold traded at $4,054.68 on Friday, roughly 10% below the quarter's mean. The tonnage that vanished in the second quarter was priced off a level the trade is no longer paying. If price is what suppressed volume, some of that volume should be recoverable in the third quarter, which is also when the Indian festive build begins.
278 tonnes is the clearest measurement yet of what $4,500 gold does to a counter, and it is not a demand collapse but a substitution. Buyers did not stop; they bought lighter, and the value line proves they kept paying. The retailer's job in the second half is to sell that substitution deliberately rather than let it happen by attrition, which means engineered lighter weights, hollow and tube construction, and a bridal price ladder that starts below the metal-driven creep. The alternative is watching the average ticket rise while the boxes leaving the shop keep getting fewer.
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India's jewellery tonnage falls 15% as the bill hits a record.