Gold Coins Demand Tops Demand for Gold
""[/phpbay]The sale of gold reached a record high of $32 billion in the third quarter of 2008, according to a report by the World Gold Council (WGC) last week. This was 45% higher than the previous high recorded in the prior quarter. The tonnage demand rose 18% year-over-year during the quarter.
According to the report, the growth in gold investment or the demand for gold coins and bars outstretched that of gold during the quarter. The demand for gold coins and bars rose 121% to 232 tonnes, with strong bar and coin buying reported in Swiss, German and US markets. WGC said that buying of gold coin reached a record 51 tonnes in Europe, with France becoming a net investor in gold for the first time in 28 years.
The quarter also witnessed gold shortages among bullion dealers across the globe, as investors searched for a haven amid concern of a global recession.
The report further said that demand for gold jewelry rose to a record $18 billion in the third quarter. The surge was due to the fall in gold prices as well as strong demand in India, the Middle east, Indonesia and China . However, the demand for jewelry declined in Western markets.
The demand for gold in the India, the world's largest gold market rose 31% to 250 tonnes or $5 billion in the third quarter. In the Middle East, the demand reached $2.8 billion.
James E. Burton, Chief Executive Officer of World Gold Council said, “Gold’s universal role as a store of value has shone through during this quarter helping attract investors and consumers to all forms of gold ownership. The rise in demand for gold bars and coins has been impressive as has the record rise in gold ETF inflows. Perhaps most encouraging is the return to positive jewelery buying which has been absent for several quarters due to the high levels of price volatility."
The trend largely reflects gold’s better performance relative to other assets and indicates a strong outlook for gold prices in near term.
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