Gold Demand Up 1 Per Cent In First Quarter
Gold demand in India in the first quarter (Q1) of the year was 1 per cent higher at 197.8 tonne compared with the previous period. The rise was attributed to brisk consumption in January and March, while demand in February was affected by price volatility.
According to the World Gold Council's quarterly survey, Gold Demand Trends, published yesterday, demand during the quarter was buoyant with price around $280 per ounce. However, consumers hesitated to buy at higher prices as they feared a price crash, as occurred after the February price spike.
A robust economy with a forecast for higher GDP growth in the current fiscal year, buoyant stock market, industrial growth, continuing economic reforms and the vibrant software sector are cited by the report as positive indicators for the good demand for gold in India. The report expects the rural demand to hold up well this year, in anticipation of a good monsoon as seen through the decade.
Derrick Machado, regional director, India, World Gold Council, said, "The projected growth of the Indian economy augurs well for gold demand in the country. Overall we anticipate a good monsoon to provide the necessary boost to agricultural production thus improving rural incomes. To a certain extent this may offset the impact of the drought in certain pockets of the country."
Official Indian gold imports in Q1 totalled 135.2 tonne, 3 per cent higher than the corresponding period last year.
Global gold demand remained strong during the first quarter. The total demand of 795.2 tonne maintained the level in the first quarter of 1999, a year in which the demand set a record for the full year, according to the World Gold Council's quarterly survey.
Global demand for jewellery was 701 tonne, 7.5 above the first quarter of 1999 and a record for the period. Consumption was buoyant in many countries, helped by the improving global economy.
The demand for gold as an investment was 94.2 tonne, 29 per cent below last year's level, with a sharp fall in sales of new coins in the US accounting for almost all the decline. US coin sales last year were exceptionally high on Y2K concerns. Elsewhere in the world, investment demand was virtually unchanged.
Haruko Fukuda, chief executive officer, World Gold Council, commented: "The continued strength of worldwide demand for gold during the first quarter of the year is encouraging for several reasons. It came in a period when physical demand often experiences some seasonal weakness, and it was maintained despite both price fluctuations during this period and the fact that the average price of $290 an ounce remained well above the 20-year lows reached last summer."