The high gold price has hurt demand for gold jewelry in the United States, according to the World Gold Council’s Gold Demand Trends report for the first quarter of 2011, which was released May 19.
“The volume of [U.S.] demand [in the first quarter] slipped 10% year-on-year to 20.5 tons,” the Council’s report said. “Retailers [are] increasingly stocking sterling silver product in order to meet affordability constraints.”
However, the report noted that, in value terms, American gold jewelry sales in the first quarter of 2011 reached $914.4 billion, a 12 percent jump over last year’s first quarter, due mostly to the higher price.
The report added that the price of gold has increased 25 percent from the first quarter of 2010, and predicted it would continue to rise.
It said that investment demand has been driven by high inflation, and unrest in the Middle East and Northern Africa. These conditions are still there, it said, along with ongoing financial problems in Europe.