Patterns of Gold Buying by jewelry consumers are showing a growing split between the rich, developed West and emerging Asian economies, according to the latest analysis by the market's top independent consultancy.
Launching a first-half update to Gold Survey 2010 at Grocer's Hall in the City on Tuesday afternoon, London's GFMS consultancy reported a sharp drop in "scrap gold" returning to market from Indian, Middle Eastern and East Asian jewelry owners.
New demand to Buy Gold leapt most spectacularly in the world's No.1 market, the Indian sub-continent, GFMS reported. But North America and Europe, in contrast, continued to increase their "scrap gold" flows, while new consumer demand for Buying Gold jewelry flagged.
"The first half of 2010 was all about India," said GFMS chairman Philip Klapwijk, presenting the data and contrasting the slow GDP growth and rising unemployment of the major G7 economies with the recovery in emerging markets.
"The stable Gold Price in Rupees was absolutely crucial, together with expectations of higher prices to come."
Even so, the consultancy expects second-half Indian Gold Buying demand to slow after the first-half of 2010's 185-tonne growth in gold buying demand, because the high level of import volumes seen in the first and second quarters now "need to be digested."
Globally, total gold jewelry demand has returned after the slump of late 2008 and early 2009 to an upward trend in US Dollar terms. But tonnage is slipping, albeit less quickly, as consumers choose lower carat products.
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