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.