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To: Goose94 who wrote (13924)	8/13/2015 9:30:23 AM
From: Goose94	Read Replies (1) \| Respond to of 203396

World gold demand fell to a six-year low of 914.9 metric tons in the second quarter, a decline of 12% from the same period a year ago, the World Gold Council (WGC) reported Thursday. The decline was blamed largely on less buying from the two largest gold-consuming nations of China and India, according to the quarterly gold demand trends report. Otherwise, demand in Europe and the U.S. grew. The WGC said buying prospects for the remainder of the year are “more encouraging” as consumers respond to the recent price drop. Meanwhile, global mine supply fell 5% year-on-year in the second quarter. “It’s been a challenging market for gold this quarter, particularly in Asia, on the back of falls in India and China,” said Alistair Hewitt, head of market intelligence at the World Gold Council. “The reverse is true for Western jewelry markets, as increased economic confidence led to continued growth in consumer demand. It is fair to say that investment demand for the quarter remained muted given the continuing recovery in the U.S. economy and booming stock markets in India and China during the quarter.” Hewitt said prospects for the jewelry market “look healthier” for the remainder of 2015, particularly with the upcoming wedding and festival season in India. “In addition, falls in the gold price have historically triggered buying in price sensitive markets and we are already seeing early indications of this across Asia and the Middle East,” Hewitt said. “Conversely, sharp falls in Chinese stock markets have shaken the largely consumer investment base and we are seeing early indications of interest in buying gold again - all illustrating the unique self-balancing nature of gold demand and the diverse drivers which underpin it.” Gold prices themselves were described as “largely directionless” between March and June. Volatility was just 13%, compared with a five-year average of 18%. “Such sideways price movement meant that consumers in a number of markets were discouraged from buying gold as they were uncertain as to whether there would be an opportunity to buy at lower levels,” the report said. Global jewelry demand was down 14% year-on-year to 513.5 tons from 594.5 in the second quarter of 2014 due to falls in consumer spending in Asia, the report said. In China, slowing economic growth and a rallying stock market led to a 5% fall in demand to 174.4 tons. In India, the heavy unseasonal rains in the first quarter and drought in the second quarter impacted rural incomes and affected gold demand, the report said. In addition, a dearth of auspicious days for marriages in the third quarter meant that wedding-related demand was unusually slow, leading to a fall in India’s jewellery demand of 23% to 118 tons. Meanwhile, global investment demand was down 11% year-on-year to 178.5 tons from 199.9 in the year-ago quarter, the WGC said. India was described as the main driver of the fall, with its demand down 30% to some 37 tons due to uncertain price expectations and a buoyant stock market. This was countered by a 6% rise in Chinese bar and coin demand to around 42 tons. In Europe, fears of a potential Greek exit from the euro zone saw retail investment in gold reach 47 tons, a rise of 19% compared to last year. U.S. retail investment increased by 7%, with U.S. Mint sales of bullion coins hitting a 17-month high in June, it said. The world’s central banks were net buyers of gold for the 18th straight month, with official-sector purchases of 137.4 tons, with Russia and Kazakhstan the biggest purchasers. Although this was a year-on-year fall of 13%, buying increased by 11% when compared with the first quarter of this year, the Gold Council said. By country, China was the world’s largest overall consumer in the second quarter, buying 216.5 metric tons, although this was a year-on-year decline of 3%. India was in second place at 154.5 tons, a year-on-year decline of 25%. Total supply of gold fell 5% to 1,032.6 metric tons, compared to 1,085.8 a year ago. Mine production increased by 3% to 786.6 tons in the second quarter. However, the WGC said mine production is expected to slow in the second half of 2015 as the industry tries to manage costs and optimize operations in the face of the challenging price environment. Meanwhile, the amount of scrap gold that was recycled declined by 8% to 251.1 tons from 272.5 in the second quarter of 2014. By Allen Sykora