India Retains Top Spot In Gold Consumption

DUBAI - India has retained its position as world’s largest gold consumer after a weak first quarter owing to around 49 per cent recovery in demand in peak wedding and festival season, the World Gold Council (WGC) has said.

China was the only gold jewelery market to grow 6 per cent in 2009, according to the figures compiled by the organization formed and funded by world’s leading gold mining companies.

“In 2009, dollar demand for gold remained above the $ 100 billion mark for the second year in succession against the backdrop of continued turbulence in financial and commodity markets,” it said.

China was the only non-western country to record growth of 22 per cent in investment demand in 2009. In contrast, ETF demand in 2009, at 594.7 tonnes, was 85 per cent higher than in 2008, equivalent to an inflow of $17.7 billion, due primarily to an exceptional first quarter.

According to the WGC Gold Demand Trends published on Feb 17, the resilience in demand was achieved as average gold prices went 12 per cent higher than in 2008, at $972.35/oz. Total identifiable gold demand fell 11 per cent to 3385.8 tonnes during 2009 when compared to the levels in 2008, masking a progressive recovery in jewelery and industrial demand.

The final quarter of 2009 showed a decline in total identifiable demand of 24 per cent in terms of tonne, against the extraordinary fourth quarter demand in 2008, it said.  During this period, the gold price averaged $1099.63, up 38 per cent on the final quarter of 2008.

Total identifiable demand during last three months was equivalent to 5 per cent rise in dollar value terms. Diversity in the gold market both on the supply and the demand side, as well as geographically, has provided significant price support for gold over the course of the year.

Aram Shishmanian, CEO of World Gold Council, said: “2009 was a year which provided a clear illustration of diversity inherent in the global gold market. Total demand for the year remained robust thanks to a rebound in jewelery and industrial demand. While total jewelery demand was 8 per cent lower in the final quarter of 2009 compared to the same period last year, it showed clear signs of a rebound in the last quarter of 2009 when compared to earlier quarters”.