Gold jewelry demand reaches new high

Global demand for gold jewelry reached a staggering $14.5 billion in the second quarter of 2007, up by 37 per cent on the same quarter in 2006.

New figures from the World Gold Council (WGC) point to particular success stories in Greater China, India, the Middle East and Turkey - all key markets for buying gold.

The new report also reveals that dollar demand for gold in the jewelry, retail investment and industrial sectors reached a new high in the second quarter.

This has been attributed to a return to "more normal levels of gold price volatility", general price acceptance and strong economic conditions in a number of key markets.

James Burton, chief executive officer of the WGC, said: "We are pleased to report a very strong second quarter with demand for gold reaching unprecedented levels in a number of markets. A reduction in price volatility in 2007 has resulted in increased consumer confidence and, coupled with greater industry marketing activity, led to record levels of gold jewelry purchases globally in dollar terms."

He added: "I am pleased to note that the dollar value of gold demand has more than doubled in just four years."

India warrants a special mention, with demand for gold in the second quarter matching half the global mine output in the three-month period. Another success story is Russia, where demand for the precious metal increased by 27 per cent in terms of tonnage over the year. China saw an even bigger improvement, with demand increasing by 32 per cent.

Net retail investment, meanwhile, increased by 51 per cent in tonnage terms between the second quarter of 2006 and the second quarter this year. In dollar terms, net retail investment in gold increased by 60 per cent.