Physical demand for gold reached a new record level of 1,793 tonnes in the first half of 1995, according to a new study by U.K.-based Gold Fields Mineral Services.
This increase in physical demand continued the pattern set in the last six months of 1994, with jewelry fabrication in India and Southeast Asia being mainly responsible for the growth. The study also shows a modest recovery in coin fabrication, while bar-hoarding moved sharply higher in response to a surge of investment demand in Japan.
On the supply side, mine production, at 1,110 tonnes, was down 1% year-on-year in the 1995 first half. Output fell in all four of the largest-producing countries in the West, namely South Africa, the U.S., Australia and Canada.
Gold Fields notes, however, that supplies from above-ground stocks increased sharply. This is attributed to the resumption of substantial official sector sales, which amounted to 244 tonnes, including 175 tonnes from Belgium. Producer forward sales, when combined with the impact of options transactions, also rose, adding some 211 tonnes of accelerated supply to the market in the half year. This total was only marginally offset by the repayment of 12 tonnes of gold loans during the period.
Commenting on the outlook for the second half of this year, co-author Stewart Murray points out that physical demand was weighted toward the second half of the year because of fabrication in the runup to Christmas and the Chinese New Year. He also noted that initial indications from trade data suggest that demand was remaining buoyant.
Be the first to comment on "Demand for gold on upward trend"