Global gold consumption for 2010 will be higher than 2009 as a result of increasing demand in India and China, sustained global demand for gold investment, and growth in jewelry and industrial demand, according to the World Gold Council.
According to the WGC's Gold Demand Trends report for Q3 2010, published today, demand for gold in the final quarter of 2010 will be driven by the following factors:
· Increasing demand by the world's two largest markets, India and China, as rising income levels, high savings rates and strong economic growth continue to push up consumption.
· Gold jewelry demand is likely to exceed that of 2009 due to an anticipated recovery in India, the most significant gold jewelry market, and continuing strength in China. While jewelry demand may face challenges ahead, the latest figures show that demand in key markets has shown resilience in the face of higher prices levels.
· Concern over fiscal imbalances and currency tensions will continue to support investment demand for gold. Aside from the recent additional US$600 billion of quantitative easing by the US, the weakening of the US dollar and associated fears of inflation, demand is also likely to be driven by higher gold price expectations, as well as increasing availability and accessibility of gold investment products to retail investors.
· Industrial demand, which has returned to long-term levels, is expected to remain firm on the back of renewed growth in the electronics industry, due to the majority of semi-conductors being wired by gold.
Richard Holliday, Director, Industrial at the WGC commented: "The recovery of industrial gold demand to pre-crisis levels will continue to be sustained by the rise in demand for high-tech goods, such as the iPad and smart phones. Longer-term exciting advancements in the use of gold in nanotechnology, environmental and biomedical applications are also expected to drive demand."
