Changing tastes: Gold jewellery in a shop in Hong Kong. Gift-related gold jewellery is often viewed as essential in traditional Chinese culture. — Bloomberg
GEORGE TOWN: The value of Malaysian-made gold jewellery exports will surpass RM7.7bil in 2024 due to higher gold prices with either a strong single-digit or double-digit percentage growth.
According to Malaysia External Trade Development Corp (Matrade) statistics, Singapore, United Arab Emirates (UAE), Hong Kong, Japan, and Australia ranked as key buyers.
Penang Goldsmith Association (PGA) adviser Joeson Khor said from January to October 2024, the UAE topped the buying list, spending RM2.1bil on Malaysian-made gold jewellery products, and Singapore RM2.4bil.
During the same period, Turkiye racked up an impressive RM501mil, Australia RM337mil, and Hong Kong RM260 mil.
Malaysia exported RM7.47bil worth of gold jewellery from January to October, compared with RM6.38bil a year ago.
“The lowering of interest rates made it sustainable to hold gold for an extended period and drove the demand.
“The US Federal Reserve (Fed) is expected to keep rates low moving into 2025, so we expect to see demand for gold and its price rising further from the current US$2,648 per ounce,” Khor said.
The Fed cut the benchmark interest rate by 25 basis points (bps) to a range of 4.25% to 4.5% in its December meeting and expect another 50 bps of cuts next year as inflation remains sticky.
“While the rise in gold price benefits those holding gold assets such as gold exchange-traded funds (ETFs), gold bars and coins, and gold jewellery, high gold prices slow down gold jewellery consumption.“
According to the World Gold Council report, in the third quarter of this financial year (3Q24), jewellery consumption fell to 459 tonnes as the gold price reached a series of successive new highs, imposing affordability constraints on consumers,” Khor said.
In 3Q24, the World Gold Council report said investment demand for gold ETFs, bars and coins more than doubled year to year to 364 tonnes as gold’s price rallied, along with rate cuts and continued geopolitical turbulence.
From January to October 2024, Matrade statistics showed Malaysia imported RM7.4bil worth of gold jewellery compared to RM6bil in the same period a year ago from the UAE, Hong Kong, Singapore, and India. In 2023, Malaysia imported RM7.6bil worth of gold jewellery.
About 80% of Malaysian gold jewellery exports come from Penang-based manufacturers and exporters.
More than 60% of the 650 PGA members are small and medium enterprises with an annual turnover of less than RM25mil.
According to the Polaris Market Research report, the global jewellery market, valued at US$256.8bil in 2023, will grow to US$269.8bil in 2024 and to US$494.8bil by 2032, registering a 7.6% compounded annual growth rate during the period.
“The jewellery market is expected to experience significant growth during the forecast period due to several key factors.
“These include acquisitions and strategic collaborations among major industry players, a rising trend for cross-cultural jewellery, and the increasing use of eCommerce for jewellery purchases,” the Polaris Market Research report said.
