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Gold demand hits record high in 2007

Dollar demand for gold hit a record high of $79 billion last year, according to new figures.

Statistics compiled by GFMS for the World Gold Council (WGC) show that a rise in overall identifiable gold tonnage demand and rising prices helped push dollar demand to record-breaking levels in 2007.

However, demand saw some falls during the fourth quarter of the year, although record inflows of $8 billion were recorded in the investment sector.

Net retail gold investment - comprising bars and coins - experienced a two per cent increase in the fourth quarter compared with the previous year.

The report follows GFMS's Gold Survey 2007, published last month, which predicted that strong demand for gold bullion will push prices past the $1,000 an ounce milestone in 2008.

Indeed, experts have recently predicted possible highs of up to $2,000 an ounce in the longer-term.

"Investment demand is likely to remain robust in the early part of 2008 as long as the current financial and economic worries and dollar weakness continue," remarked James Burton, chief executive of the WGC.

"A growing awareness among investors of the long-term benefits that a small strategic allocation can bring to a balanced portfolio should also contribute to rising investment demand."

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