According to data compiled by London-based Gold Field Minerals Services (GFMS) for the World Gold Council (WGC), the combination of a robust economy and buoyant stock market helped fuel purchases of the metal during the first eight to nine months of the year, despite gold breaching the psychologically significant level of Rs 9,000 per 10 grams in September.
In the fourth quarter, however, demand decelerated sharply as gold underwent a period of considerable volatility and reached record highs of over Rs 10,000 per 10 grams.
Consumers in India pay more attention to the stability of prices than the outright price and many have deferred purchases until prices settle down.
Jewellery demand in 2007 accounted for 558.2 tonnes, a rise of 6 per cent from 2006. Net retail investment for the year rose 10 per cent to 215.4 tonnes, a release issued by the WGC said.
Investment purchases appear to have been more resilient to the price changes during the last quarter, with the festival of Diwali encouraging robust demand for coins and bars.
Investment demand continues to be encouraged by the rising price of gold, which generated returns of around 16 per cent in rupee terms during 2007. Indeed, during 2007, annual investment demand in India was the highest on record having more than doubled since 2004, the release added.
In China, total consumer demand reached 326 tonnes, a rise of 26 per cent as compared with 2006. China has now overtaken the US as the second largest volume retail market for gold jewellery after India, with demand for jewellery reaching 302 tonnes and surpassing 300 tonnes for the first time since 1997.
In Turkey, 2007 brought record overall demand for gold. Jewellery demand stood at 188 tonnes, its second highest annual figure ever, up 14 per cent from 2006. Net retail investment demand was up 2 per cent at 61 tonnes.
Strong growth continued in Russia with jewellery demand rising 11 per cent to set a annual record. Growth remained vibrant throughout the year with demand in Q4 nearly 25 per cent higher than the corresponding quarter in 2006.
India, the world's largest and also most price sensitive gold market, recorded a 64 per cent fall in demand on year earlier levels following 40 per cent growth in the first three quarters.
|
STILL SHINING Combination of a robust economy, buoyant stock market helped fuel purchases of the metal during the first nine months of the year Jewellery demand in 2007 accounted for 558.2 tonnes, a rise of 6 per cent from 2006 In China, which overtook the US as the second largest volume retail market, total consumer demand reached 326 tonnes |
