Global jewellery demand during the third quarter of 2015 grew 6% year-on-year to reach 631.9 tonnes (t), and investmenr demand soared 27% to 295.7 tonnes, according to Gold Demand Trends Q3 2015, a quarterly pulication from World Gold Council (WGC) which was released today.

WGC said that lower prices during July and early August attracted consumers, making this the strongest third quarter for jewellery demand since 2008, and also drew bargain-hunting investors to the yellow metal, not just in the traditional price-sensitive markets of Asia and Middle East, but all across the globe.

The publication said that Q3 was a period of two distinct halves. A price dip buoyed consumer demand in the first half, before a positive shift in institutional investors’ positions pushed prices back up in the second. Bargain-hunting during the first six weeks of the quarter was most apparent in the bar and coin space, although jewellery demand also benefited, WGC said.

This reaction to the price drop, brought about by ETFs divesting their stocks in anticipation of a US Fed Reserve rate hike, WGC noted, was maginified to a certain extent by ‘a tough second quarter’. The report drew attention to the fact that retail investors in North America and to an extent Europe, also reacted to the price fall, unlike in the past, causing a surge in demand for bars and coins. Coin sales by the US Mint during the quarter were on a par with that of Q4 2008, while European investors drove demand up by more than a third to 60.9t.

In India, jewellery demand was up by 15% (+26.9t) compared with Q3 2014. At 211.1t, demand almost equalled the previous peak of 213.0t from Q3 2008, with the sudden spurt being driven by a drop in the local price to about Rs25,000/10g.

In China, jewellery demand rose by a more modest 4%, driven by the lower price that prevailed in the build up to the Chinese equivalent of a Valentine’s Day which fell on August 20.

WGC however warned that despite the strong Q33 showing, fourth quarter outlook was more muted. In India, some consumers may have already advanced their festival and wedding purchases to July to take advantge of the price dip rather than wait till October-November, so demand towards the end of the year is likely to be correspondingly affected. The impact of the relatively poor monsoon on rural demand will also be felt in Q4.

In China, too, expectations for the fourth quarter are somewhat more conservative, bearing in mind the weakening macro picture, WGC said.