Searching the ‘news’ today I came across a short article posted below that talks about gold demand in general but the more interesting part is the automotive industry's possible shift to using gold in catalytic converters instead of platinum in diesel vehicles. One would think if they can swap Au for Pt as a catalyst there then there will be other industrial applications as well. Automotive use alone was 119 tonnes (250 in the second article) last year. I wonder how that demand will change price.

Source: http://www.commodityonline.com/news/...
(secondary source: http://www.mineweb.com/mineweb/view/... )
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2007-12-21 19:00:00
Gold merry to go through Christmas season
By Rama Chandra Sahu

NEW DELHI : The yellow metal continues to attract investors zest globally as the commodity market gains more strength thanks to price performance of select commodities setting new record on reaching multi year highs.

By the end of 2007 credit crisis concerns in global financial markets would be cleared out and the geopolitical tension coupled with additional catalysts has the potential to continue the drive of gold price afresh 28 year high.

Strong physical and investor demand emerging upon price dips should provide a solid footing for prices coupled with sustained ETF positions.
This outweighs the two bearish factors for gold, one, a slowdown in producer de-hedging and pick up in central bank sales and secondly speculative length in gold is high and there is potential for short-term price correction but chances are strong in medium & long term.

Indian jewelry demand rose by 70% during the first half compared with the same period last year. Domestic consumption increased to 387 tones from 227 tones during the same period. Rising disposable income of middle class people and strengthening of the Rupee by around 10% also made the yellow metal more attractive to surge the demand.

Industrial consumption for gold has also increased during this period. Automotive industry adopts breakthrough technology that would allow use of gold to reduce of emission.

Gold is expected to replace platinum in automotive catalysts. According to international projection during 2007, 4.24 million oz or 119 tones of platinum was used in automotive catalysts. Using gold in this sector with nearly half of the price ($800 OZ) will further reduce the use of platinum.

Expecting the overall sentiment remain bullish unless the US markets take some more series to post up side economic growth, the gold price may test around $900 per oz in middle-term.

Rama Chandra Sahu is a Senior Commodity Analyst with Voguestock Ltd