Gold demand to slip by 15 per cent worldwide in 2009: GFMS

Jewellery fabrication business worldwide is likely to fall in 2009 on high gold prices with offtake forecast to slip by 15 per cent compared to the year-ago period, a latest report says.

"Despite early signs of economic recovery in many regions, gold price levels will continue to be the determining factor, and with many price sensitive markets expected to remain weak for the remainder of the year, we expect jewellery fabrication for 2009 as a whole to slip to levels not seen for more than two decades," GFMS' Executive Chairman Philip Klapwijk commented.

According to the latest GFMS report, there was a substantial 25 per cent year-on-year fall in global jewellery fabrication, with offtake slumping 248 tonnes compared with the first six months in 2008.

The update concluded the key reason for the decline was the fragile economic environment and high gold prices, with double-digit fall in all regions except East Asia where the fall was offset by demand from Chinese fabricators.

The consultancy noted that higher scrap volumes substituted for new gold demand, making the slump even more pronounced, with the first half demand slumping by 32 per cent, or over 200 tonnes — the lowest level in over 25 years.