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)