Market Leader informed
The 2010 Q3 report prepared by the World Gold Council (WGC) suggests that India holds an invariably leading position in the consumer market of gold jewelry. Total world demand for gold was 922 tons in 2010 Q3, or 12% more than in the respective period of 2009. India, China, Russia and Turkey are responsible for about 63% of gold demand globally.
WGC experts believe India to be the most promising market for jewelers. Gold has long been cherished in India as a symbol of success, health and wellbeing. Popular tradition requires use of a variety of gold products in everyday life and much more during holidays, especially wedding ceremonies. The season of weddings and autumnal religious festivals always stimulates unusual demand for gold items among the Indian population.
About 75% of the country’s total demand in 2009 involved jewelry, 23% - investments and 2% - industrial needs. In 2009 India imported $19 bn worth of gold or 15% of the total global demand. India’s annual demand for gold imports has been growing on an average of 13% over the past ten years coming almost 6% ahead of GDP real growth rates.
In Q3 this year India imported 214 tons of gold (as compared to 176 in Q3 2009) and 629 tons over the nine months of 2010 which has already exceeded the figure for the entire 2009 during which the country purchased 552 tons.
Demand for gold jewelry in July-September 2010 amounted to 184.5 tons (as compared to 135.2 tons for the same period in 2009) demonstrating a QoQ growth of 36%.
Forecasts for the fourth quarter are positive: despite some rise in gold prices (22% since the year start) global demand does not subside and even remains rather stable, especially in Asian markets. Another serious factor that encourages demand for gold jewelry in this quarter traditionally involves national holidays – Diwali and Dhanteras in India, Eid al-Adha in the Middle East, Christmas and New Year in countries where western culture is prevalent.
Besides, WGC experts count that central banks will continue maintaining and expanding their gold reserves in Q4 though this process has slowed down a bit after the IMF sold the remaining 52 tons of its gold reserves.
For example, the Central Bank of Russia increased gold purchases by 7% which took its gold reserves to 756 tons, Philippines and Taiwan increased their reserves by 2% and 19%, respectively. According to the Gold Council‘s analysts this buying by countries above (including Bangladesh which bought 10 tons of gold from the IMF in September) is driven by the desire to diversify foreign currency reserves.
Demand for industrial gold also demonstrates steady growth and, as compared to last year, is gradually recovering from the consequences of the crisis. Gold is widely used by industry to produce semiconductors, consumer electronics (cell phones, laptops, smart phones etc), cars. It is electronics manufacturers that on average take the lead in forming demand for industrial gold. Demand figures grew in 2010 H1 by about 30% as compared to 2009 H1. Again, experts emphasize the huge role of developing markets, primarily China and India. Nevertheless, data included in the WGC’s report suggests that the growth index for industrial gold demand in 2010 Q3 remains noticeably different from pre-crisis figures.
Recently China announced its intention to gradually build up its gold reserves which are currently at 1,054 tons. By way of comparison: US gold reserves are 8,133 tons, Germany – 3,403, Italy – 2,453, France – 2,435, the International Monetary Fund, the largest holder of the gold reserves, - 2,907.
As of 18.58 GMT, the Troy ounce of gold went for $1,376 and was taken for $1,377.
You are free to discuss this article here: forum for traders and investors
No comments:
Post a Comment