FT gold update
(Re Robert, he used to be the only poster here -g-)
Gold investors put off by high prices
By Matthew Jones
Published: September 17 2002 14:32 | Last Updated: September 17 2002 14:32
news.ft.com
Global gold demand fell by 14 per cent year-on-year in the second quarter as higher prices frightened off investors, industrial users and retail consumers, the World Gold Council said on Tuesday.
Total demand fell from 850 tonnes in the corresponding period of last year to 729 tonnes. But the actual amount spent on gold remained stable at $7.3bn as gold prices rose by an average $45 an ounce to $312.7 per ounce, buoyed by security concerns in the Middle East and declining gold production.
The biggest fall came in the jewellery sector, where demand slipped 15.8 per cent to 580.8 tonnes. A large part of this was due to a 37 per cent decline in demand in India, the world's largest national market for gold, due to a strong rise in the rupee price for the metal.
Industrial demand fell 6.4 per cent compared with the second quarter of 2001 to 74.4 tonnes while investment demand slipped 11.7 per cent to 56.8 tonnes.
"Political and economic concerns underpinned a strong increase (in investment demand) in some countries, but the rise in the price of gold also encouraged dishoarding in others," the council said.
Japanese gold consumption rose by 40 per cent to nearly 30 tonnes during the quarter, fuelled by a sharp increase in retail investment demand, which more than doubled to 18 tonnes due to fears over the state of the Japanese banking industry.
But the strong euro price of gold prompted an increase in investment gold sales in Germany and France, where there was a net disinvestment of 4.3 tonnes and 6.9 tonnes respectively.
The US surprised analysts by showing a 1 per cent increase in demand for gold jewellery, despite shaky consumer confidence in the wake of September 11 and falling sales of luxury goods.
Demand for jewellery in the UK fell 5 per cent overall to 10.9 tonnes, bringing to an end a six-year period of growth. But the Council said consumers appeared to be becoming more discerning, with demand for 18 carat jewellery up 10 per cent compared with a 7 per cent fall in 9 carat gold sales.
The report followed a study by Gold Fields Mineral Services on Monday that said initial estimates of global gold mine production pointed to a substantial fall in the first half of 2002. GFMS did not publish any figures but said the fall was mainly due to lower output in the US and Indonesia. |
