Overview

There are both differences and similarities in jewellery purchasing habits across countries. Demand is affected by different cultural and social factors but market research also shows that feelings towards gold are very similar and that there are common core attitudes towards gold across different markets.

For instance, the purchase of gold jewellery is associated with special occasions such as Valentine's Day, weddings, anniversaries and birthdays throughout the world. Market research responses show that there are consumer "segments" which exist in all countries although the importance of each segment can vary from country to country.

For further details, see WGC's report on consumer attitudes to gold, "A Passion for Gold"

Seasonality

Jewellery demand is seasonal. The fourth quarter is the strongest quarter due to Diwali, Christmas and other end of year festivals when jewellery gifts are common. The long holidays around 1st May (Labour Day), National Day and Chinese New Year in China are also occasions associated with the purchase of gold jewellery. 

The first quarter is normally the second strongest quarter due to the Chinese New Year, the Indian wedding season and, to a lesser extent, Valentine's Day.

The second and third quarters are usually seasonally low with a relative absence of major gold giving occasions. The start of the second quarter nevertheless sees wedding seasons in parts of India while May sees the Akshaya Trithya festival in India. Tourist demand is at its peak in Turkey in the third quarter. In contrast the third quarter sees the Shrad - a fortnight whose religious significance is not propitious for gold buying by Hindus.

India

India is the world's largest gold jewellery market by volume accounting for around 590 tonnes of consumption demand in 2005. Traditionally gold is 22 carat. Gold jewellery buying is associated with a number of festivals and, in particular, with weddings.

The gold given at weddings is important for women as it traditionally remains her property. For festivals, Diwali is a traditional gold giving occasion. Akshaya Tritya has become important in the south, encouraged by WGC promotions.

A feature of Indian demand is its extreme sensitivity to price volatility - this is the country where that factor is of most importance in affecting gold demand.

Over half of demand comes from rural or rural town areas. Demand here is largely traditional. It is affected by incomes and thus the quality of the monsoon is important. In these areas gold is also important as a means of saving - a gold chain or bangle which can be worn on the person is considered a relatively safe way of storing wealth.

In urban areas demand is more influenced by western tastes. Like similar markets, gold here faces competition not just from other forms of jewellery but also from the broader competitive set of luxury goods, electronics and consumer services. Promotion is thus important in order to maintain and boost demand.

The majority of gold used in India is imported but most jewellery is fabricated within the country. Indeed India has a thriving jewellery industry and has become a major exporter.

USA

In terms of consumption demand, the USA is the world's second largest gold jewellery market by volume (around 350 tonnes) and the largest by retail value (around $16billion). Retail value refers to the value of jewellery sold rather than the gold content. Christmas and end of year festivals are clearly the most important time of year for demand but Valentine's Day in February and Mother's Day in May are also gold-buying occasions.

Gold may be of 18, 14 or 10 carat. White gold has gained in popularity since the mid 1990's.

In the world's largest consumer market, gold clearly faces intense competition. Nevertheless promotion helped to ensure that both the volume and retail value of gold sold increased steadily throughout the 1990s and retail value has continued to increase even through the tougher economic climate of the last few years.

Jewellery fabrication has declined in the US due to the cost competition from other centres. Most gold jewellery is now imported with Italy, Turkey and India being among the major suppliers.

China

Despite China's dynamic growth the gold jewellery market, until recently, was made difficult by strict regulation and demand was stagnant. Prices were controlled and foreign companies were unable to manufacture or sell gold. With the absence of more dynamic operators, the market was failing to produce jewellery that appealed to younger, urban consumers.

Since 2002 this situation has seen a dramatic turnaround. Gradual deregulation has allowed a growing influence from outside China. Innovative products such as K-gold, 18 carat gold with Italian inspired design, are proving successful in attracting the urban cosmopolitan market.

The majority of gold jewellery sold in China is chuk kam or virtually pure 24-carat gold, often bought for ceremonial occasions and with a high level of intrinsic investment value. This is sold by weight with a low retail mark-up and can on occasion be traded in by the purchaser for new jewellery or cash.

K-gold, since its launch in 2003, already accounts for over 15 per cent of the market. Over half of K-gold is sold as white gold (which by definition the 24 carat gold can not be) responding to the popularity of white metal among many younger consumers.

Middle East

Many Middle Eastern markets have a strong affinity to gold. 21 carat is the traditional caratage in Saudi Arabia and the Gulf region. Dubai - always a gold trading centre - has become a major hub for gold and jewellery trading over the past ten years reflected in its reputation as "Dubai - City of Gold".

The gold souk and other outlets cater for local and expatriate demand but also for tourists and business visitors from all over the world, particularly from India, at highly competitive prices. Gold of 18, 21, 22 and 24 carat can be purchased here in a huge variety of designs catering for all markets, but nothing below 18 carat, since metal below 18 carat is not legally considered to be gold.

Gold promotions are intrinsic to the three shopping festivals a year: the Dubai Shopping Festival in the early months; Dubai Summer Surprises; and Dubai - City that Cares during Ramadan.

Turkey

The Turkish gold jewellery market has undergone a major revival since the early 1990s with the traditional and long-standing historical affinity for gold jewellery adjusted for modern tastes. The development of good quality manufacturing has made the industry a substantial success not just locally but also in catering for tourists and in a lively export business.

Turkey is now the world's fourth largest market for gold jewellery, its third largest manufacturing centre and its second biggest exporter. A combination of economic revival and successful promotions saw jewellery demand at a record in 2005.

Italy

Italy has long been the world's leading gold jewellery manufacturing centre and the leader of jewellery fashion. It has faced substantial competition from lower-cost manufacturing centres in recent years and its fabrication has declined. Its domestic market has suffered too as consumers, against the background of a sluggish economy and increased competition.

Despite this, Italy remains the undisputed leader of fashionable and high quality jewellery design and the city of Vicenza hosts the leading trade fair each year. While demand for basic products is declining, that for more innovative and high quality pieces is now showing healthy growth.