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Message: 50$ plus move in gold

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holdyergold

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Re: 50$ plus move in gold

in response to 50$ plus move in gold by mongoldia

posted on Nov 21, 08 12:02PM

not only that, demand is increasing!

Business News

Gold demand reaches record high in Q3
By Rachel Kelly, Channel NewsAsia | Posted: 21 November 2008 2024 hrs

Photos

1 of 1

Gold bullion bars

SINGAPORE: Demand for gold reached a record high in dollar terms in the third quarter of this year at US$32 billion amid the turmoil in financial markets.

According to the World Gold Council, demand for gold jewellery has also been strong, especially in Asia.

Marcus Grubb, managing director, Investment Research, World Gold Council, said: "Early Q4 numbers were quite strong in India; China looks quite strong as well. Of course, we are concerned that gold demand will reduce in Asia because of the effect of the recession and it's really starting to hit.

"So this will put pressure on jewellery demand, but we still think it will hold up quite well in Q4. It will hold up next year too – certainly better than Western markets."

Jewellery demand accounts for about 60 per cent of total gold demand. China has already reported an 18 per cent increase in gold demand for the third quarter, bolstered by its increasingly affluent population.

China is now the world's largest gold producer, although it is still a gold importing country.

Jewellery demand in India also remains strong into the fourth quarter. Some 50 tonnes of gold were sold in the first two days of the Diwali festive season alone.

Physical gold aside, market-watchers said gold exchange traded funds are also growing in popularity.

Sammy Yip, head, Exchange Traded Funds Asia Pacific, State Street Global Advisors, said: "I think with the recent credit crunch, investors are looking for an asset class to diversify their risk in their portfolio, and I think gold always performs as a very consistent diversifier in a lot of investors' portfolios."

Exchange traded funds, gold bars and coins were the highest contributor to the spike in gold demand for the third quarter, bringing some US$10.7 billion worth of gold investment to the table, or double on-year.

As long as the markets continue to be volatile, analysts said demand for gold would stay strong.