Gold demand up 5%: WGC Q3 report

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Mumbai, Nov 19 India’s gold demand in the third quarter of 2007 rose 5% year-on-year. However, buying faded towards the end of the quarter as prices soared. For the third quarter, India’s gold demand amounted to 185.1 tonne compared with 176.2 tonne a year earlier. However, this was slower than first and second quarter growth, by 7.8% and 39.1% respectively, according to ‘Gold Demand Trends’ released by the World Gold Council.During the third quarter, gold jewellery demand at 134.8 tonne was the strongest since 2000 and retail demand at 50.3 tonnes was a third quarter record. Overall consumer demand was the highest since 1999.

While the effect of an appreciating rupee which kept price below the psychological Rs 9,000 per 10 gm mark and expectations that price was on an upward curve managed to keep demand buoyant for most of the third quarter, a sharp rise in price since mid September contributed to overall attrition in demand compared to the strong previous quarter levels, report said.

In its outlook, WGC noted that while high prices or gently rising prices were not a deterrent to gold buying in India, volatile and rapidly rising prices could dent demand.

Looking forward, the WGC believes that investor interest will remain very strong in the near future and that, as the price stabilizes, major gold jewellery buying nations, such as India, China and the Middle East, will quickly adapt to a higher floor in the price.Total physical global demand for gold in the third quarter rose by 19% year on year to 947 tonne and hit a record $20.7 billion in dollar terms as the market saw a surge in investor interest, largely on a safe haven basis, amidst growing concerns over the fallout from the US sub-prime lending crisis and its effects on global Markets, report said.

Gold demand to rise by 10%

Gold demand in India, the world’s biggest consumer, may climb by as much as 10% a year as rising incomes in Asia’s third-biggest Economy spur jewellery purchases, SBI chairman OP Bhatt said. The South Asian nation’s Economy has grown an average 8.6% since 2003, the fastest pace since independence in 1947.