Facts ‘n’ figures: Gold demand healthy in Q1

The following is an edited excerpt from The World Gold Council’s summary of its report, Gold Demand Trends Q1 2011. The full report can be found at www.gold.org.

Global gold demand looks robust throughout 2011, on account of another strong quarter, the geographic and sectoral diversity of demand and strong fundamentals. According to the Gold Demand Trends

Q1 2011 report, demand for gold in the rest of 2011 will be driven by a number of key factors. 

Prevailing global socio-economic conditions will drive investment demand for gold. These include: uncertainty over the U.S. economy and the U.S. dollar, European sovereign debt concerns, global inflationary pressures and tensions in the Middle East and North Africa. 

Sustained momentum in Chinese and Indian jewellery demand will underpin growth in the jewellery sector throughout 2011. Strong demand in India during the recent Akshaya Tritiya festival and the beginning of the wedding season, and extensive purchasing on dips in the gold price, underlines the strength of the Indian market.

Net purchasing by the official sector is expected to continue in 2011, as central banks turn to gold as a means of diversifying their reserves into an asset with no credit or counterparty risk. 

Global gold demand in the first quarter totalled 981.3 tonnes, up 11% from 881 tonnes in the first quarter of 2010. In value terms, this translates to US$43.7 billion, compared with US$31.4 billion in the first quarter of 2010, an increase of almost 40%. A rise in demand for bars and coins supports this increase, along with growing jewellery demand in key markets.