8% Demand Growth of Gold Witnessed World Over

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Last updated at: (Beijing Time) Thursday, April 18, 2002

8% Demand Growth of Gold Witnessed World Over

According to World Gold Association's report on gold demand trends, individuals' gold demand for investment in the 4th quarter of 2001 registered an 8% growth and this had been mainly due to an unstable world political situation and unsteady financial and economic markets developed throughout the world. Customers use gold as capital for making investment or as a means for guaranteed inflation proof savings deposits.

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World gold demand increasing

According to World Gold Association's report on gold demand trends, individuals' gold demand for investment in the 4th quarter of 2001 registered an 8% growth and this had been mainly due to an unstable world political situation and unsteady financial and economic markets developed throughout the world.

World gold demand in 2001 was placed at 3,235 tons for a cut of 2% less than 2000. Of these, 2,840 tons had been used to an ornament purpose to show a reduction of 2% less than 2000. Meanwhile, 395 tons had been utilized as investments for a growth of 4% over 2000.

Unstable economic situation results in rising demand

Experts told that an increased amount of gold had been demanded for being used for investment last year and this was because primarily an unstable international economic situation had been developed. Consequent upon this was a cut of interest rate of deposits by banks and increased gold purchases by small-amount investors. Following the "September 11" terrorist attacks in the US, a demand growth to 110 tons of gold in the 4th quarter of 2001 was reported to show an 8% rise over the same period of 2000 in specifying role of gold as the sanctuary of capital at a perilous time.

In the first or two months of the 4th quarter of 2001, an unstable overall world situation was seen and with this was a speedy cutback of the world economy made and a raise of gold price that had been brought about. A slump market accordingly resulted in a reduction in gold consumption by customers for ornaments. By the end of 2001 there had arisen a stable situation in world politics and consequently upon this was a recovery of customers' confidence and a raise of their demand for gold consumption. But the demand of gold used to a an ornament purpose in the 4th quarter of 2001 showed a cut of 4% less than 2001 to an amount of 767 tons for a sluggish gold market originally developed.

Fast growth of gold demand in China and Japan

Statistics told that China's gold demand last year totaled 213.2 tons to show a rise of 3% over 2000, ranking it the 4th largest world gold consumer with a demand amount less than India (855.2 tons), the US (409.5 tons) and Saudi Arabia (228 tons). China has gradually opened its gold market and relaxed its control on detail pricing of gold in stimulating a rise in gold demand in China. Meanwhile, as a result of various other new policies in opening up the Chinese gold market a steady growth in gold consumption has been induced.

Japan had experienced the fastest growth in world gold demand for investment last year. Gold used in the form of gold bars and species as investments in the 4th quarter of 2001 registered a growth of 54% to an amount of 21.5 tons over the same period of 2000. Japan's gold demand for investment takes one fifth of the world total. In 2001, gold demanded by the country for making investment amounted to 64.8 tons to show a growth of 25% over 2000. Meanwhile, an investment demand of 109.3 tons of gold was reportedly raised throughout the world to show a growth of 12% in 2001, representing Japan as a country with the fastest growth of demand for gold.

Gold mainly used as capital for investment

In spite of the "September 11" terror attacks and a sluggish economy developed in the US, a record demand growth for gold has still been achieved in the country over the past 11 years. This is especially so with things after the "September 11" attacks in the US: Customers use gold as capital for making investment or as a means for guaranteed inflation proof savings deposits. World gold demand in the 4th quarter of 2001 totaled 132 tons to show a growth of 4% over 2000. Meanwhile, gold demanded for being used to an investment purpose throughout the world totaled 409.5 tons to show a rise of 3% over 2000.

From an integrated global economy and a multiple form of investment being developed there has been seen a strengthening of the function of gold as a commodity and a weakening of its part as a financial means or capital to be used. President Haruko Fukuda of World Gold Association gave his view that though a relapse in the amount of gold demanded for investment in the 4th quarter yet a demand growth had still been recorded. When speaking of the overall situation of gold market this must be an encouraging development. Since 2001 financial setbacks further show that gold may serve as the sanctuary of capital when "things on the world should be at a perilous time".

By People's Daily Online staff member

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