Asian gold sales sparkle amid recovery
Asian gold sales sparkle amid recovery
SINGAPORE (AFP): Gold demand in Asia rose in the first quarter as economies continued to rebound and the lunar new year boosted jewelry sales, the World Gold Council said in a report received here Wednesday.
Key Southeast Asian markets Thailand, Indonesia, Vietnam, Malaysia and Singapore collectively posted the highest growth in the region, with demand rising 35 percent from a year ago to 72.4 tons.
Thailand, one of the worst-hit countries during the economic crisis which erupted in mid-1997, saw a 126-percent rise in demand to 21.5 tons, the London-based council said in its quarterly report.
Celebratory spending to usher in the Year of the Dragon was also credited for the rise in Asian consumption, offsetting falls in Japan and Hong Kong.
The council tracks consumption of gold jewelry, bars and coins in leading markets representing about 80 percent of total world demand.
On a global level, demand was up one percent to 795.2 tons, but this "picture of overall stability" masked sharply different trends. Apart from Southeast Asia, Turkey, Brazil, Mexico and Britain also showed outstanding gains.
In India, traditionally the world's largest market for gold, demand rose only one percent in the first quarter to 197.8 tons as sales were affected by price volatility. But the council said prospects were good.
"The economy is robust with the consensus forecast for higher GDP growth in the current fiscal year ending March 2001. Stock markets are buoyant while industrial growth, continuing economic reform and the vibrant (computer) software sector augur well for future prospects and rising prosperity," the report said.
In Greater China, demand rose four percent to 90.8 tons. In the mainland, demand was up three percent to 56.5 tons while in Taiwan it was 27.5 percent higher at 27.5 tons, neutralizing a seven percent decline in Hong Kong to 6.8 tons.
In South Korea, demand rose two percent to 30 tons as the economy continued its upswing, and jewelry demand has now recovered to the point where it is almost back to the level seen before the economic and currency crisis prompted widespread selling of gold back to the market.
In Japan, there was a 39 percent decline to 22 tons as investors took advantage of the relatively high gold price in yen to switch funds into cash ahead of the financial year-end, the council said.
Meanwhile, Reuters reported gold was holding well above key support levels in Europe on Wednesday but traders expected some selling during the session.
At 1005 GMT spot bullion was quoted at $274.00/$274.50 compared with New York's close on Tuesday at $274.10/$274.60.