From the Financial Times:
GOLD: Koreans shake market
By Kenneth Gooding
Patriotic South Koreans played havoc with the gold market in the first quarter by giving 228 tonnes of the metal to their government to help pay off some of the country's debts.
About 3.5m Koreans responded to the "Save the Nation" gold collection schemes after their country was caught up in the Asian economic turmoil.
One quarter of all households supplied some gold - an average of 65 grams each, or just over 2 ounces - mostly in high-quality jewellery.
Indonesians also added to the gold market's woes by selling a net 64 tonnes, sometimes to buy necessities after the value of their domestic currency collapsed.
Others were tempted to take profits as the domestic price of gold soared.
Indonesian jewellers were also hastily cutting back stocks.
The unprecedented sales in the two countries cut gold demand in the first quarter by 55 per cent to 342.1 tonnes or 11m troy ounces, according to the World Gold Council, a promotional organisation financed by some big producers.
The Council, which monitors 21 countries accounting for about 80 per cent of global demand, said it was the first significant fall in gold consumption since it launched its survey in 1992.
George Milling-Stanley, the Council's manager of gold market analysis, said the once in a lifetime Korean scheme ended in March and the trends were positive for gold again.
In the first quarter, India re-emphasised its role as the world's biggest gold consuming nation, taking a record 190.7 tonnes, 17 per cent above the total for the same months of 1997.
Mr Milling-Stanley said sales were boosted by the government's further deregulation of the gold market and a smaller price premium in India compared with the international dollar price.
There were also record quarterly gold sales in the US, where they were up by 10 per cent to 88.1 tonnes.
Jewellery sales surged in tandem with the US economy, and gold coin purchases jumped by 66 per cent, as some investors saw them as a good bet when the gold price in dollar terms fell to an 18«-year low.
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