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Gold/Mining/Energy : Gold Derivatives -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (16)	9/28/1998 2:18:00 AM
From: paul ross	Read Replies (2) \| Respond to of 39

World Gold Council says Q2 gold demand up 50 pct SYDNEY, Aug 19 (Reuters) - World gold demand recovered strongly in the second quarter of 1998 to rise by more than 50 percent from the depressed first quarter to a total of 634.3 tonnes, the World Gold Council (WGC) said in its second quarter report on gold demand trends. After the Asian economic crisis pushed demand down in the first quarter, second quarter demand was only nine percent lower than the record second quarter of 1997, WGC said. Gold consumption totalled 1,040.9 tonnes in the first half of 1998, down by 28 percent on the first half of 1997 in the 25 key world markets monitored by the WGC. WGC manager of gold market analysis George Milling Stanley was optimistic that gold would continue to recover. ''After a roller-coaster first half, overall gold demand looks set for further growth as the year progresses,'' he said. Milling-Stanley also told Australian journalists in a telephone news conference that Russia's currency crisis was not expected to destabilise the gold market through sales by that country's central bank. The most significant development in the second quarter was the end of the huge gold collection campaign from the public in South Korea, coupled with a sharp reduction in selling back to the market by private individuals in Asia, he said. These two factors ''blew a hole'' in gold demand in the first quarter of the year, when consumption slumped by 55 percent to 342.1 tonnes, he said. However, the severe economic and currency crisis in Asia continued in the second quarter to keep gold demand below normal levels in several countries ''in spite of continued good performances in most of the rest of the world,'' he said. India, the world's biggest gold market, continued to benefit from government liberalisation of the gold market with second quarter demand rising by 15 percent to 206.1 tonnes. Demand in the United States, the world's second-largest market, also remained very strong, Milling-Stanley said. U.S. second quarter demand rose by 19 percent to 83.7 tonnes on the previous corresponding period, mainly on investment demand. Recent market liberalisations in China, third in the world ranking, should soon start to have a positive impact, he said. Demand fell by 23 percent in the latest quarter to 76.6 tonnes in China, Hong Kong and Taiwan ''as the Asian contagion spread.'' Demand continued to fall in Japan, by 21 percent to 21 tonnes. But net demand in South Korea recovered to 14.5 tonnes after net dishoarding of 228.0 tonnes in the first quarter. In Indonesia, net dishoarding fell to 1.0 tonne from 64.0 tonnes in the first quarter. Demand remained depressed in Thailand, Singapore and Malaysia, WGC said. In Europe, demand rose by 10 percent to 56.1 tonnes, with strong growth in France and Britain. ''Demand for both jewellery and especially investment is growing around the world and the outlook is for the recovery to continue for the remainder of the year,'' he said. WGC, which monitors gold in countries covering 80 percent of world demand, said demand in key developing countries recovered sharply as net dishoarding ended in South Korea and was virtually eliminated in Indonesia. The 473.5 tonnes consumption in those countries in the latest quarter was double the depressed first quarter, although it was 14 percent lower than the second quarter of 1997. The Asian economic crisis continued to have a markedly adverse effect on demand in East Asia, WGC said. Southeast Asian and South Korean demand of 32.8 tonnes was a 301 tonne turnaround from the 268.1 tonnes net outflow of the first quarter but only a third of 1997 second quarter demand. Related News Categories: international Help Copyright c 1998 Reuters Limited. All rights reserved.