Gold Bar and Coin Market "3 Times Bigger Than ETFs"

THE WORLDWIDE market for Gold Bars and coins is three times larger than that for Gold ETFs, with growth in China especially strong, a leading gold industry expert said Thursday.

Gold Bar and coin demand in 2010 was just under 1200 tonnes – more than three quarters of all investment demand, WGC figures show.

"Demand for gold in China is still extremely strong" Marcus Grubb, the World Gold Council's managing director for investment, told an investment conference in London, citing inflation fears as a reason behind recent growth in Chinese gold demand.

Demand for Gold Bars and coins in China was 90.9 tonnes in the first three months of 2011 – a 123% rise on the same period last year.

Grubb noted that while Gold ETF demand in 2010 was lower than in 2009, falls in the Gold Price do not tend to lead to significant redemptions.

"The hot money in gold tends to stay in the futures market," said Grubb.

Growth in demand for Gold Bars and coins is not limited to Asia. WGC figures show that German demand jumped 103% between Q1 2010 and Q1 2011 – from 18.6 tonnes to 37.7 tonnes. 

German refining group Heraeus this wrote that the next German "buying spree" for Gold Bars "is only a question of time", owing to negative economic news, especially on Greece.

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