Indonesia's demand for gold drops

Indonesia's demand for gold drops

SEMARANG, Central Java (JP): Indonesia's demand for gold
dropped by six tons to 29 tons during the first quarter of this
year, the World Gold Council's Indonesian representative Leo Hadi
said.

Speaking to reporters after the closing ceremony of the Gold
Exhibition 1996 here Tuesday evening, Leo said that during the
first quarter of last year, the demand was 35 million tons.

"The drop in demand is due to the decrease of the people's
purchasing power following a number of natural disasters that hit
Indonesia recently. Many people had to sell their gold stocks for
their day-to-day needs," he noted.

He pointed out that the drop was also caused by the increase
in gold prices following the recent uncertainty in the country's
political situation.

According to Leo, the gold price increased from US$402 per
ounce during last year's first quarter to $417 during the same
period of this year.

The $15 increase is the highest rate within a quarter during
the last decade.

But he expected the demand will rise to at least 32 tons
during the second quarter of this year due to the continuing high
economic growth in Indonesia.

"The rising demand will continue until the end of this year,"
he said. (13)