Global demand for gold jewellery has reached a record US$14.5bn, 37% higher than the second quarter of 2006 with particular strength across the key global gold markets, according to figures released by the World Gold Council (WGC). The results, compiled independently for WGC by Gold Fields Mineral Services Limited (GFMS), showed that total identifiable demand made a substantial recovery in Q2 2007 from the impact of the volatile prices experienced in 2006, rising 19% in tonnage terms on Q2 2006, and reaching US$19.8bn, a 27% increase in value terms year on year. Total demand hit 922.0 tons.
On the other hand, net retail investment increased by 51% in tonnage terms to 132.9 tonnes and 60% in dollar terms reaching US$2.9bn, compared to Q2 2006. Investment in Gold-Backed Exchange Traded Funds (ETFs) was negative over the quarter, with small net redemptions of 2.6 tonnes. Total identifiable investment fell just 4.8% in tonnage terms and increased 1% in dollar terms at $2.8bn, compared with Q2 2006. Total identifiable investment reached 130.4 tons.
Where industrial demand is concerned, the second quarter of 2006 saw a slight increase of 2% in tonnage terms to 116.5 tonnes; and 9% up in dollar terms to 2.5bn, a new quarterly record. Electronics demand, which grew strongly in 2006, also recorded a further 2% increase in tonnage compared to Q2 2006.
In the Middle East and GCC region, demand saw a 20% increase to 97.5 tonnes higher than the depressed levels of the same quarter in 2006 (jewellery demand increased by 21%, net retail investment increased 9%). The increase was due to strong economies and stable prices in this region, according to the report. Demand in UAE, was strong with Q2 consumer demand 15% above as compared to year-earlier and jewellery demand 18% higher. This is because of the economy remained very strong and tourist numbers continue to grow – especially towards the end of quarter two when the Dubai Summer Surprises Festival has started. Total gold demand in UAE in Q2 reached 29.8 tons.
“We are pleased to report a very strong second quarter with demand for gold reaching unprecedented levels in a number of markets. A reduction in price volatility in 2007 has resulted in increased consumer confidence and, coupled with greater industry marketing activity, led to record levels of gold jewellery purchases in the region and globally in dollar terms,” said Moaz Barakat, World Gold Council’s managing director in the Middle East, Turkey and Pakistan.
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