The total global gold jewellery fabrication (excluding the use of scrap) during the first half of 2008 shrank by 36% to its lowest level in around two decades, due to high and volatile gold prices in the world market, according to London-based precious metals consultancy, GFMS. The precious metals consultancy released its latest report on the gold market ? ?Gold Survey 2008 – Update 1? on Wednesday.
?Looking at jewellery fabrication, excluding the use of scrap can provide a better indication of the call on the global gold market, as this measures demand for new gold. During the first half, jewellery fabrication, on this basis, shrank by 36% or close to 350 tonne, to its lowest level in around two decades,? Philip Klapwijk, executive chairman, GFMS, said on Wednesday.
High and volatile gold prices were chiefly responsible for the decline, which saw the world total fall by some 300 tonnes, compared with the first six months of 2007. The most pronounced drop in jewellery (including the use of scrap) was seen in India, whose jewellery fabrication over the first six months effectively halved year-on-year. Elsewhere, substantial declines were recorded across much of the Middle East, with both Turkey and Saudi Arabia, the region?s two largest fabricators, seeing falls of around one-fifth.
In the US, one of the main jewellery consuming markets, the continued shift away from gold by retailers hit the country?s jewellery offtake.
?We still expect prices to rally and this could bring an end to the recovery we have so far seen in the third quarter.? Klapwijk said.
Gold prices were expected to gain strength after its significant sell-off since July, and could reach up to $900 an ounce, and perhaps over $950 in the next few months, he said.