London–The United States was one of the few countries to report a gain in gold jewelry sales in the first quarter as jewelers continued restocking the product, some after exiting the market completely.
According to the World Gold Council’s recently released Gold Demand Trends report for the first quarter, U.S. demand for gold jewelry rose 2 percent year-over-year.
Though the increase is modest, it marked the ninth consecutive quarter the U.S. market has shown growth, which is “impressive for a market where economic growth has remained relatively anemic,” the World Gold Council said.
The council also noted that imports of gold jewelry to the U.S. rose double digits year-over-year in January and February–indicating continued demand in the market–and that jewelry sales showed stronger than expected growth in the first month of the year.
However, the presidential election “loom(s) over the market” and might “temper” consumer enthusiasm as November gets closer.
Price-wise, the metal averaged $1,182.60 an ounce during the quarter, down 3 percent year-over-year but up 7 percent from $1,106.50 in the fourth quarter 2015.
The gold price surged at the end of the quarter, averaging $1,246 in the month of March and hitting as high as $1,294 since then, data from Kitco.com shows.
The London PM fix on gold was $1,265.90 on Friday.
Globally, jewelry demand was down 19 year-over-year on the quarter and 27 percent as compared with the fourth quarter 2015. The decline in Q1 figures was due to weak demand in the world’s two biggest markets for gold, India and China.
Indian demand dropped most sharply, falling 41 percent year-over-year while demand in China was down 17 percent.
Overall demand for gold was up 21 percent year-over-year in the first quarter, the strongest Q1 for the metal on record, the World Gold Council said.
Investment demand drove the increase, as a mix of factors–including the negative interest rate policies in Japan and Europe and the anticipated slowing of the increase in US interest rates–undermined investor confidence in traditional investment vehicles.