Global gold demand powered this year by China, India: WGC

26th August 2010, Comments 0 comments

World gold demand will be powered for the rest of 2010 by emerging market giants India and China, and increased investment buying, the World Gold Council said.

"Gold will remain robust during 2010 as a result of accelerating demand from India and China, as well as increasing global investment demand driven by continuing uncertainty over public debt and economic recovery," the WGC said in a report released late Wednesday.

The precious metal hit a record 1,265.30 dollars per ounce on June 21, propelled partly by concerns over the poor economic climate.

Gold, whose two main drivers are jewellery and investment buyers, is viewed as a safe-haven investment in times of economic uncertainty.

Total gold demand jumped 36 percent from a year earlier to 1,050 tonnes in the second quarter, the London-based WGC added on Thursday.

This was largely because of an enormous 118-percent increase in investment demand during the three months to June.

"Economic uncertainties and the ongoing search for less volatile and more diversified assets such as gold will underpin investment demand for gold in the immediate future," said Marcus Grubb, WGC managing director of investment.

"Further, in light of lingering concerns over public debt levels and the euro, European retail investor demand has increased significantly."

In dollar terms, world gold demand soared 77 percent to 40.4 billion dollars in the second quarter, according to the WGC.

"India and China will continue to provide the main thrust of overall growth in demand, particularly for gold jewellery, for the remainder of 2010," it said.

In Thursday afternoon trading on the London Bullion Market, the price of gold rose to 1,244.30 dollars an ounce from 1,237.50 dollars an ounce on Wednesday.

© 2010 AFP

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