Increasing 38 per cent year on year to 1016 tonnes, the surge represents a 36 per cent rise in value to $29.7 billion US, said the World Gold Council (WGC) in its “Q1’09 Gold Demand Trends” report. GFMS Ltd., compiled the figures.
The upturn in investor demand is in sharp contrast to gold jewellery demand, which fell 24 per cent from first quarter 2008 figures due to decreasing consumer discretionary spending.
While China recorded a growth of three per cent, the world’s largest gold market—India—tumbled 83 per cent to 17.7 tonnes on pressure from record rupee prices and a hard-hit domestic economy.
On the industrial side, demand fell 31 per cent due to slower sales in electronic goods like laptops and cell phones.
WGC chief executive officer Aram Shishmanian says gold continues to hold its value.
“The shift in the balance of demand we have witnessed this quarter, where the gold price has risen despite a severe drop in jewellery and industrial demand, perfectly demonstrates the robust nature of gold’s fundamental supply and demand dynamics,” he noted.
“While jewellery demand is unlikely to return to more positive territory in current market conditions, it remains a key market driver. Affinity for gold jewellery remains and we are confident demand will grow as consumer confidence and purchasing power returns.”
Investor and jewellery demand in the Middle East experienced similar declines (28 per cent and 26 per cent, respectively), largely due to high prices and less discretionary spending.
This picture was in sharp contrast to the United States, which saw investment demand rising 216 per cent and jewellery demand falling 30 per cent.
