Greater gold demand likely: WGC

Greater gold demand likely: WGC

LONDON (Reuters): Lifting taxes, duties and other controls on
gold trade could boost demand by hundreds of tons in countries
like China, Brazil, Indonesia and Mexico, the World Gold Council
(WGC) said on Wednesday.

Price controls, import duties, taxes and bars on individual
investors hoarding the metal stem from "outmoded" thinking forged
when gold was a currency bulwark, the WGC said in a report on
regulatory barriers to world gold trade.

The report identified three categories of economy in its
country-by-country summary of regulations, those wealthy ones
with liberalized gold markets but little tradition of gold
buying, emerging countries with fairly free gold markets and
those emerging economies with restrictive gold regimes but strong
gold cultures.

It was in the third group that the WGC spied the greatest
potential for increased demand, a group comprising Brazil, China,
Indonesia, Malaysia, Mexico and South Korea.

By extrapolating to these six countries the effects on demand
of India's ongoing gold market deregulation the study predicted
1,427 tons of extra demand for gold jewelry each year given
similar deregulation.

Gold in dollar terms has fallen from its $367.70 an ounce
opening bid on Jan. 2 through to $287.70/$288.20 last quoted on
Wednesday.

Yesterday morning, gold and silver drifted gently as platinum
group metals held their ground ahead of the gathering market
doldrums traders predict for the remaining days of December.

Gold fixed at $287.05 an ounce in the morning, down a touch on
Wednesday afternoon's $287.85.

Spot gold was last at $287.50/$288.00 versus its previous
London close of $287.70/$288.20, having put on a brief spurt
after the morning fix.

Silver was last indicated at $5.98/$6.01 an ounce versus its
$5.97/$5.99 close.

Platinum was last at $351.50/$353.50 versus its London close
of $349.00/$351.00 while palladium was at $190.00/$192.00, up
$2.00.