Electronics makers load up on gold
CAROLYN LEITCH
Globe and Mail Update
{Comment:
recall some CB in Europe sold into the 3rd quarter ...}
Makers of electronics were loading up on gold in the third quarter while consumers put off purchases until a sudden late-September splurge, according to the World Gold Council in London.
Volatile prices scared off consumers and traders in July, but by late September a dramatic shift in demand had taken place as the price of bullion fell below $600 (U.S.) an ounce and customers rushed to buy jewellery, the council said.
Much of the shopping took place in Asia and the Middle East, with Indian imports in September at the second-highest monthly level ever.
Consumers and traders, it seems, are willing to buy at prices below $600 an ounce, but they resist at prices above that level, the council observed.
Reflecting the rally in the price this year, total demand for gold dropped 3 per cent measured in tonnes but jumped 37 per cent by value in the third quarter, compared with the same period last year, according to data compiled by London-based consultant GFMS Ltd.
The price of gold was, on average, 41-per-cent higher than in the third quarter of 2005.
Industrial users were the only buyers to purchase bigger quantities of gold; demand for jewellery and investment purposes dropped.
Measured by value, on the other hand, demand was up for the jewellery, investment and industrial sectors.
“As expected, the price volatility seen at the beginning of the quarter dampened consumer appetite, which was then followed by a stabilization in the price and a subsequent resurgence in demand from consumers toward the end of the quarter,” Council chief James Burton said in a statement.
Mr. Burton said consumers seem to have become comfortable with prices in the $570 to $600 range, in the same way that they adapted to the price range of $420 to $440 in the first half of 2005.
But Mr. Burton was cheered by the strong performance in industrial demand for gold, which was 5-per-cent higher in the quarter compared with the same quarter last year.
Electronics demand in particular set a new quarterly record with a 9.1-per-cent rise, the council said.
In the industrial arena, gold finds its way into medical applications, pollution control, mobile telephones and laptop computers.
During the quarter, both July and August saw gains in overall holdings of gold-backed Exchange Traded Funds, with only a slight fall in September. This trend suggests ETFs are primarily being purchased by long-term investors, the council said.
Looking at the fourth quarter, the council noted that consumer demand was very strong in October with the Hindu festival of Diwali and the Eid-al-Fitr celebration to mark the end of the Muslim observance of Ramadan adding to its strength.
theglobeandmail.com
regards,
John |
