The World Gold Council (WGC) sees a bright year for gold in 2010, with strong investment demand coming from the U.S. and Europe, and rising jewelry demand in China and India.
That was one of the key messages delivered by the WGC in its webcast this week that went over the gold demand trends for the first quarter of 2010.
The chart above shows how gold jewelry bounced back in the latest quarter compared to the first quarter of 2009, despite significantly higher prices. In emerging markets, jewelry demand was up 43 percent year-over-year.
In India, the demand was about 148 metric tons (4.8 million troy ounces), nearly fourfold higher than a year earlier. The WGC says gold consumers in India and China, where the increase was also notable, are getting used to the idea of higher prices. In the U.S., jewelry demand was down slightly.
Industrial demand was up 31 percent – much of this is related to improved conditions for the electronics industry.
While total identifiable demand was down on a year-over-year basis, net retail investment demand was up 26 percent in the quarter.
This trend was led by the developed world, where sovereign debt concerns, contagion worries and massive budget deficits have shaken confidence in paper currencies as a store of value. The WGC says purchases by gold-backed ETFs have risen in the current quarter, and that gold demand is especially brisk among German and Swiss buyers.