The UAE remains the world’s fifth-largest in terms of gold jewellery demand despite falling consumption level in the past 12 months as the yellow metal’s rise to all-time highs above $2,400 an ounce this year continues to captivate global markets.

With an annual gold jewellery demand of nearly 40 tonnes, the UAE shares the rank with Russia, followed by Saudi Arabia in the 7th position, a research conducted by a team at The Gold Bullion Company reveals.

In 2023, total consumption of gold in the UAE reached 39.7 tonnes, down from the 46.9 tonnes recorded in 2022, according to the World Gold Council. “The drop in the UAE was mainly due to the high base of 2022, which had been boosted by the post-Covid return of tourism,” WGC said. In the first quarter of 2024, the demand fell 10 per cent year-on-year to 10.8 tonnes, the lowest in the previous nine months.

The UAE has the world’s second-highest consumer demand for gold jewellery per capita at 5.07 grams, after Hong Kong, which has a consumer demand per capita of 5.12 grams, the highest in the world as of 2023.

Last year, the global jewellery industry accounted for 48.7 per cent of gold demand. With an estimated market cap of $15.8 trillion, gold has seen almost a 20 per cent increase in value compared to last year.

China, which replaced India as the world's top consumer of gold jewellery in 2023, has the highest demand for gold jewellery with 630 tonnes, a 10 per cent year-on-year increase.

Escalating geopolitical tensions and the prospect of lower US interest rates all burnish gold’s billing as an investment. But bolstering the rally is the Chinese demand, as retail shoppers, fund investors, futures traders and even the central bank look to bullion as a store of value in uncertain times.

China and India have typically jostled for the title of world’s biggest buyer. But that shifted last year as Chinese consumption of jewellery, bars and coins swelled to record levels. China’s gold jewellery demand rose 10 per cent while India’s fell 6.0 per cent. Chinese bar and coin investments, meanwhile, surged 28 per cent.

“This is unsurprising as China is the world's largest single market for gold. The precious metal has also seen substantial growth in its role as a safe-haven investment. Gold jewellery also holds deep cultural significance and is seen as a sign of wealth and good fortune, making it a popular asset to purchase,” the study said.

India takes second place with jewellery demand totalling 562 tonnes. The metal is popular in India, with the nation also ranking in the top ten nations with the highest gold reserves in the world with approximately 804 tonnes of gold worth a value of $50 billion.

Rounding out the top three countries with the highest demand for jewellery is the United States. The country has sustained a solid reputation for accumulating the largest gold reserves in the world (worth $507 billion), with almost more gold than Germany, Italy, and France put together. Turkey is in fourth position at 42 tonnes.

The US tops the list as the world’s biggest gold nation with 8,133 tonnes in gold reserves, equating to $507 billion in monetary value.

India has the most increased interest in gold reserves, with 29,300 Google searches for the term ‘gold reserves’ as of February 2024.

The gold bar and coin sector is in more demand in China than in any other nation. The strong investment demand for gold has naturally led to the popularity of gold bars and coins in the country, resulting in 280 tonnes.

China is the largest gold producer in the world, producing approximately 375 tonnes. Over several years, China has remained top of the list due to its commitment to large-scale mining operations, accounting for 10 per cent of the global production of gold in 2022.

Regarding regions with the highest gold ETF holdings, North America takes the lead with 1,581 tonnes, accounting for over half of the world’s total ETF holdings (51 per cent), with countries such as the US (1,518 tonnes) and Canada (63 tonnes) as the biggest contributors.

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