Indian Q1 Gold Demand Up 17%, Says Wgc

India, the worlds largest consumer of gold, has registered a 17 per cent increase in demand in the first quarter of 1998 at 190.7 tonne against the first quarter of 1997. The official gold imports were steady at 139.1 tonne, according to the latest world demand trends released by the World Gold Council (WGC) yesterday. The global gold demand for 1997 stood at 737 tonne.

The council has also noted that discarding'' by several Asian countries - S Korea, Indonesia, Vietnam - has resulted in an overall decline in the aggregate first quarter demand, bringing it to the lowest level since prior to 1990s. The aggregate demand declined by 70 per cent to 177.8 tonne across the developing markets following the sell-off by south-east Asian countries.

The study further shows that across the south-east Asian markets the net selling back to the markets was at 268.1 tonne compared with a net offtake of 156.8 tonne in the first quarter of 1997.

Commenting on the gold demand witnessed in the country, the WGC chief executive (Middle-East and India), Rolf Schneebeli said, The Indian industry is moving in a positive direction. This has reinforced the consumer confidence in gold which has been reflected in the increase in demand, he said.

On the issue of overall demand for gold across the markets, he said, The increase in demand for gold in Europe/US and the selling of gold by south-east Asian markets are two sides of the same coin. While south-east Asian markets have sold gold, they had made purchases to tide over financial and economic crisis...the west on the other hand has looked as gold in its traditional form as a nest egg by buying the yellow metal for investment purposes.''

The increased demand for gold in India was attributed to lower gold prices and easier access to supplies following liberalisation of the Indian gold markets. Further, demand for gold due to the festive/marriage season grew sharply due to the slide in international prices.

The factors which have led to the increase in gold imports are:

* RBIs announcement for banks to import gold on loan, effectively allowing banks to provide gold loans to the domestic markets.

* Import of gold under OGL. Imports under this scheme reached a record 125.7 tonnes in the first quarter.