Demand for gold continues to increase
By Lydia Chen |
August 19, 2011, Friday
|
Print Edition
Print Edition
DEMAND for gold continued to increase in China and India over the second quarter of this year despite a global year-on-year 17 percent fall over the same period, the World Gold Council said yesterday.
Although the quarterly average gold price rose by 26 percent from April to June, demand rose 38 percent from a year ago in India, and 25 percent in China, the council said in its quarterly report.
The growth in the two markets, which have a traditional preference for gold, is likely to continue due to increasing prosperity, high levels of inflation and forthcoming gold purchasing festivals, the report said.
Marcus Grubb, managing director of investment at the council, said: "The strength of demand in India and China, coupled with an overall drop in recycling activity this quarter, shows consumers have adjusted to the current price environment and expect the upward price trend to continue.
"Continuing macro-economic uncertainty, the continued sovereign debt crisis and widespread inflationary pressures will result in gold demand remaining strong."
Despite this, global gold demand declined year-on-year by 17 percent to a total of 919.8 tons in the second quarter, with many countries in the European region slashing their demand, according to the council.
Demand in the second quarter of last year jumped to 1,107 tons, the highest since the third quarter of 2008 and the second-highest since at least 2005, according to council data.
However, gold demand grew by 5 percent year-on-year, reaching US$44.5 billion in the second quarter, the second-highest quarterly value after a record US$44.7 billion in the fourth quarter of last year.
The price of gold hit another record high, at US$1,829.70 per ounce, in trading yesterday in New York as investors spooked by the prospect of a return to recession sought safety in the precious metal.
Prices have averaged US$1,509.22 over the quarter, up 26 percent from a year earlier and 8.8 percent higher than the first quarter, according to the council's data.
Although the quarterly average gold price rose by 26 percent from April to June, demand rose 38 percent from a year ago in India, and 25 percent in China, the council said in its quarterly report.
The growth in the two markets, which have a traditional preference for gold, is likely to continue due to increasing prosperity, high levels of inflation and forthcoming gold purchasing festivals, the report said.
Marcus Grubb, managing director of investment at the council, said: "The strength of demand in India and China, coupled with an overall drop in recycling activity this quarter, shows consumers have adjusted to the current price environment and expect the upward price trend to continue.
"Continuing macro-economic uncertainty, the continued sovereign debt crisis and widespread inflationary pressures will result in gold demand remaining strong."
Despite this, global gold demand declined year-on-year by 17 percent to a total of 919.8 tons in the second quarter, with many countries in the European region slashing their demand, according to the council.
Demand in the second quarter of last year jumped to 1,107 tons, the highest since the third quarter of 2008 and the second-highest since at least 2005, according to council data.
However, gold demand grew by 5 percent year-on-year, reaching US$44.5 billion in the second quarter, the second-highest quarterly value after a record US$44.7 billion in the fourth quarter of last year.
The price of gold hit another record high, at US$1,829.70 per ounce, in trading yesterday in New York as investors spooked by the prospect of a return to recession sought safety in the precious metal.
Prices have averaged US$1,509.22 over the quarter, up 26 percent from a year earlier and 8.8 percent higher than the first quarter, according to the council's data.
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