Global gold demand is expected to be higher in the second quarter of 2010 than a year ago, powered by robust investment demand in the West and strong jewellery demand in Asia, a senior World Gold Council official said.Global gold demand fell 25 percent to 760 tonnes in the first quarter of 2010, driven by a 99 percent drop in buying of gold for physically-backed exchange-traded funds (ETFs), but was expected to rebound in the rest of the year, the industry-funded WGC said earlier this week."I think second quarter overall demand is up on last year," Marcus Grubb, the WGC investment managing director, told reporters on the sidelines of a conference in Milan."You've got strong jewellery demand in Asia and strong safety buying of gold in the West at the moment," he said.The euro zone debt crisis has spurred Western investment demand in gold in the second quarter above the levels seen a year ago, Grubb said.Investments in ETFs rebounded to hit new record highs in the second quarter while purchases of gold coins and bars surged, especially in Austria, Germany and Switzerland, he said.Grubb said the ETF investment growth was sustainable: "The main drivers of buying are not going away".Grubb declined to make gold price forecasts but said he would subscribe to the market view that gold would have strong support at $1,050-1,045 per ounce.Spot gold was quoted at $1,206.40 an ounce at 1504 GMT on Friday versus $1,211.10 an ounce late in New York on Thursday.Jewellery demand in China, the world's second-biggest gold consumer after India, is set for a new rise in the second quarter, Grubb said.The picture in India is mixed in the second quarter with Akshaya Tritiya festival expected to boost jewellery buying but weakened rupee against the dollar making gold more expensive for locals, he said.Full-year gold demand in India is expected to be stronger than in 2009, he added.CENTRAL BANKSCentral banks, which used to sell about 400 tonnes of gold a year in the past few years, have largely stopped selling and some of them, like Russia's central bank, are buying gold as "the ultimate reserve", he said."Overall they are net buyers at the moment. We continue to see that central banks are going to be strong supporters on the market... You will see that in the second quarter and the rest of the year," he said.Last year, the world's central banks sold 44 tonnes of gold and in 2010 they may sell about the same amount or even less after having sold 15 tonnes so far this year, Grubb said.The International Monetary Fund sold 18.5 tonnes of gold in March under the second phase of its gold sales programme, according to the WGC data.Asian central banks are set to keep buying gold to absorb euro- or dollar-denominated export revenues, Grubb said.Global scrap gold supply is likely to fall to about 1,000 tonnes in 2010 compared to 1,668 tonnes in 2009, returning to normal sales of the recycled yellow metal, Grubb said."A lot of near-market scrap has already been recycled during 2009 during the recession and credit crunch," he said.In the second-quarter, China and India are likely to see weak gold scrap sales, but in Europe more used jewellery may come to the market, he said.(Editing by Anthony Barker)News posted by www.newsinfoline.com
Click here to read more news from www.newsinfoline.com
Please follow our blogs
newsinfolinephotogallery
prabugallery
newsinfolinephotogallery1
photogallery1
No comments:
Post a Comment