Popley Group celebrates Women's Day

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Post By : IJ News Service On 07 March 2014 5:05 PM
The World Gold Council (WGC) has released the Gold Demand Trends as observed throughout the year 2009, in which it mentions that gold demand in terms of the US dollar for the year remained above the $US100 billion mark for the second year in succession, against the backdrop of continued turbulence in financial and commodity markets. This resilience in demand was propelled by the rise in average gold prices, which increased by 12 percent at $US972.35/oz, as compared to the average gold price in 2008. %% The report mentions that total identifiable gold demand in volume dipped 11 percent to 3385.8 tonnes(t) in 2009, over 2008, despite the progressive recovery made by jewellery and industrial demand after a slow first quarter in 2009 and the resurgent investment demand which increased in the year. The identifiable gold demand in fourth quarter of 2009 saw a 24 percent dip in volume, over the same period in 2008. In the last three months of 2009, gold price averaged $US1099.63, rising by 38 percent over the corresponding three months in 2008. The total identifiable demand during the final three months of $US 29 bn was equivalent to a 5% rise in $US value terms. %% After a slow first quarter, gold demand picked up in the Indian market towards the fourth quarter of 2009, owing to the wedding season and festivities like Diwali and Dhanteras. Fourth quarter demand amounted to 180.7tonne rising by 17 percent over the year’s third quarter when it was154.4t. Fourth quarter demand was 13 percent higher than year earlier levels of 159.6t. %% The weak economy and steep gold prices in 2009 affected its demand to dip by 33 percent on 2008 levels to 480.0 tonnes. India remained the world’s largest gold consuming nation in 2009. Jewellery demand in Q4 totalled 137.8 tonnes, rising by 8 percent from Q3 and by 27 percent from Q4 of 2008. On an annual basis, India’s appetite for jewellery in 2009 totalled 405.8 tonnes, a decline of 19% as against 501.6 tonnes in 2008. %% Ajay Mitra, Managing Director, Indian Sub-Continent - World Gold Council, commented: “Several factors have come to play which have been the main drivers for gold demand in India in the fourth quarter. Firstly, the Reserve Bank of India’s purchase of 200 tonnes from IMF was fundamental in restoring consumer sentiment towards gold and providing reassurance that gold is a store of value, as well as underpinning gold price expectations. Secondly, the arrival of the wedding and festive season increased overall demand for gold across India. Thirdly, a number of market facing initiatives were taken by World Gold Council and its partners in the jewellery and investment sectors, which helped contribute to the upswing in demand following an extremely weak first quarter.%% He further added that: “Recent quarters have also seen a change in the mix of investors in India as new players with a shorter time horizon have come onto the market adding to the overall demand for gold. Budget constraints have continued to have a dampening impact on both the jewellery and investment sectors, as incomes have not kept pace with the rise in the gold price”. %% Total investment demand for gold in India stood at 42.9 tonnes in the fourth quarter, 57 percent higher than the previous quarter but 16 percent lower than the levels of Q4 2008. Investment demand over 2009 as a whole was down 65 percent on the levels of 2008. Demand for coins, which are a common investment vehicle for consumers across various strata’s, also recovered strongly; however higher gold prices and budget constraints have had a dampening impact on this segment. While there is room for further inventory build-up by the retail sector, the overall outlook for India still remains cautious due to high prices and budget constraints. While the purchases by the Reserve Bank of India had an important impact on sentiment in Q4, it is unclear how long this optimism will persist in a price sensitive market.
Although the demand for jewellery in December had dipped owing to high prices of the metal, January gold prices took and dip and re-invited the buyers.

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