Jun. 4 – Ever-soaring prices for gold did little to dent strong demand for jewelry in China and India during the first quarter as industry experts appeared confident in the yellow metal’s potential for growth throughout the shaky economic terrain of 2010.
“The diversity of demand for gold, both by sector and geography ensures that the outlook for gold remains strong for the remainder of 2010,” said Aram Shishmanian, CEO of the World Gold Council, in a May 26 press release.
“Despite increasing gold prices, consumers in China and India will continue to drive market growth, particularly in jewelry,” he added.
Gold prices averaged US$1,109.1 in the first quarter, a 22 percent year on year increase. Prices struck a record high US$1,248.9 in mid-May, when investors ditched the euro to seek the relative safety of gold following Europe’s sovereign debt crisis.
Consumers in both India and China seemed nonplussed by the record high prices.
During the first quarter, Indian consumer demand surged 698 percent to 193.5 tons. Chinese demand was more modest, rising 11 percent to 105.2 tons in the same period of time.
The first four months of the year typically show a spike in demand for gold jewelry in both countries, as the Indian spring wedding season and the Chinese New Year spur consumption.
India is the largest consumer of gold in the world, accounting for 25 percent of total jewelry sold and 19 percent net retail investment demand in 2009.
China is the world’s largest producer of gold and second largest consumer, although its per capita consumption is quite low compared to India.
