Gold demand steady in 2001

In the first half of the year, gold demand held its ground despite the global economic slowdown.

For the first six months of 2001, gold jewelry sales and personal investment in the world’s leading gold consuming countries totalled 1,601 tonnes, which is 1% higher than in the first half of 2000. The first quarter was particularly strong, with demand 6% higher than a year earlier. Demand in the second quarter was dampened by economic problems in specific countries; as a result, demand fell 3%, year over year, to 764 tonnes.

Despite these conditions, there was encouraging growth during the second quarter in several key consuming regions, including the Middle East, where demand rose 13% in Egypt, 9% in Saudi Arabia and 8% in the Arabian Gulf. Growth was helped by the effect of high oil prices, effective promotional campaigns and some deregulation.

Demand in Vietnam and India remained strong, growing by 21% and 7%, respectively. In the U.S., despite the slowdown, robust consumer spending coupled with the swing to yellow-gold jewelry and a recovery in new coin sales pushed demand to 80 tonnes, or 4% higher than in the first half of 2000.

On the down side, the global economic slowdown tempered demand growth in Southeast Asia, Europe and Latin America. In a few countries, local economic conditions brought a sharp fall in demand. For example, gold consumption fell 72% in Turkey; 47% in Taiwan, 19% in Pakistan; and 18% in Japan.

“Gold demand is not independent of economic conditions,” says Haruko Fukuda, chief executive officer of the World Gold Council. “However, growth is holding up in key markets, such as India, the Middle East and the U.S.”

— The preceding is from a publication of the World Gold Council, based in London.