China and India lead jump in gold coins and bar investment, but ETF sales by Western money managers still weigh heavy...

 

THIS YEAR's gold coin and bar demand from private investors already totals more than three-quarters of 2012's full-year total, according to authoritative data compiled for the World Gold Council.

 

The market development organization says in its latest Gold Demand Trends that physical gold investment demand for coin and bar exceeded 913 tonnes in the first six months of 2013. That equaled 76% of last year's total, says the report, which uses figures compiled by Thomson Reuters GFMS.

 

World leading gold markets China and India have seen gold coin and bar demand rise more than 50% year to date. That's on top of a surge in gold jewelry demand, also spurred says the World Gold Council by 2013's sharp drop in gold prices.

 

"In both markets," says the World Gold Council, "the strength in second quarter demand was indicative of opportunistic buying not only at the consumer level but also by the trade, which used the opportunity to bolster stocks."

 

But whilst Indian households are renowned for price sensitivity in gold, "This attitude among consumers is perhaps a more surprising result for China," the Q2 gold demand report goes on, "where the historical tendency has been to buy into a rising trend, and is more remarkable for the fact that the second quarter is traditionally a seasonal low point for gold, coming as it does after the Q1 peak of Chinese New Year-related purchases."

 

Both in China and India, the World Gold Council adds, consumers responding to a survey showed strongly "positive price expectations in the market", with the proportion of 1,000 respondents in each country saying they believe the gold price will rise increasing from 62% to 66% between May and July.

 

However, continued and heavy sales by Western money managers previously holding gold shares in exchange-traded funds again outweighed the global rise in gold coins and bar demand in the second quarter of 2013.

 

Overall, world gold demand slipped 12% from the April-June period last year, down to 856 tonnes as gold ETF sales totaled more than 400 tonnes net.