As the spot price of gold hit yet another record on Aug. 18,
the World Gold Council acknowledged that gold jewelry sales in the United States fell sharply
in the second quarter of 2011.
Gold jewelry demand declined in the second quarter to 210
tons, an 8 percent drop from the previous year, the Council said in its quarterly
wrap-up of “Gold Demand
Trends.” However, in value terms, demand strengthened 15 percent to $1.1
The Council blamed the U.S. economy for the causing an
“environment that was not favorable to gold jewelry demand.”
“Ten karat items were seen encroaching on the 14 karat market
share,” the report says.
Gold jewelry also faced increasing demand from silver, “with
brands such as Pandora appealing to the mass market, while the rising price of
diamonds also proved detrimental to demand for gem-set gold jewelry.”
Otherwise, the Council’s report was upbeat, with worldwide
gold jewelry demand hitting 919.8 tons worth $44.5 billion, the second highest
quarterly result on record. India and China were the two biggest contributors to the
metal’s growth, both in terms of jewelry and investment demand.
The spot price of gold rose to a record $1,881 an ounce on
Aug. 18. At press time, it was trading at $1,851.