Industry Body: Global Gold Demand Eases
Gold consumption fell slightly in the third quarter as sliding jewelry demand in China offset strong growth in India, sector data showed on Thursday.
Overall demand dropped by 2.0 percent in the three months ending September 30 to 929.3 tonnes compared with the third quarter in 2013, the World Gold Council said.
"This quarter the market continued to find its feet after an exceptional 2013, with China catching its breath and buying in the build-up to Diwali driving Indian jewelry purchases," said Marcus Grubb, managing director of investment strategy at the World Gold Council.
India's jewelry demand surged 60 percent year-on-year to 183 tonnes, which was the second highest third-quarter on record for the country.
"While the increase is partly reflective of the weakness in Q3 in India last year when the government introduced import curbs and raised import duties, it also demonstrates the resilience of the country's appetite for gold jewelry," the WGC said.
"Improved consumer confidence in both the domestic economy and the new government added to the positive sentiment, with strong levels of purchasing being seen in the build up to Diwali" -- the popular Hindu 'festival of lights'.
In China, jewelry demand slumped 39 percent year-on-year.
"China’s jewelry market continued to normalize following last year’s rapid expansion" amid sliding prices, the WGC said.
Alistair Hewitt, head of market intelligence, added however that China remains "a very key pillar of global gold demand".
Demand by investors for gold bars, coins and exchange-traded funds, grew 6.0 percent to 204 tonnes.
"We are on course for a very solid year of central bank demand," Hewitt told Agence France Presse. "Our expectation is that it will end up somewhere between 400 and 500 tonnes. That's a really good source of demand for the gold market."
The price of gold traded on the London Bullion Market slumped by 28 percent last year. It last week struck a four-year low, hit by persistent dollar strength.
A strong dollar makes commodities priced in the unit more expensive for buyers using weaker currencies, denting demand.
Source: Agence France Presse
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