Key factors driving jewelry demand in the main gold consuming countries are income growth and price volatility. 

Generally, jewelry demand increases with income growth and in periods of steady price increases, and reduces in periods of price volatility or decline.  A rising price reinforces the inherent value of gold jewelry, which is an intrinsic part of its desirability.  Consumer demand for gold jewelry is also positively associated with incomes.  As a result, economic growth in India, China and the Middle East is supportive of the gold price because it results in increased demand for gold jewelry as more households move into higher income categories.

Jewelry demand is generally considered to provide a price floor rather than serving to drive the price to new heights.  A key market indicator, in the wake of a price rally and the attendant volatility, is to note the level at which the jewelry sector re-enters the market.

The role of gold in India illustrates many of these points.
A Passion for Gold provides insight into the reasons that motivate different groups of women around the world to purchase gold jewelry and an indication of what this implies for the outlook of jewelry demand.