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Indian retail investment fall by 41%By Rajesh Kumar, Section India Jewelry News
In India the retail investment in second quarter of 2008 fell by 41% to 43.4 tonnes, as investors were deterred by price volatility and as inflation reduced funds available for saving said a report by World Gold Council.
Trends in retail investment demand differed significantly from market to market. There were strong increases compared to the previous year in China, the US and Vietnam fuelled by concerns over the general economic climate, inflation and stock market falls. Industrial and dental demand declined by 5% on year earlier levels to 111.8 tonnes, primarily due to declining demand for gold in the dental and `other industrial' sectors, which fell in response to the continued high gold price it said. In value terms, demand was equivalent to $3.2bn, a rise of 27%.
"As expected, the continued high and volatile gold price, together with economies across the globe witnessing inflationary pressures and a tightening of consumer wallets, dampened consumer demand for gold in tonnage terms during the quarter," said CEO of World Gold Council James Burton.
Holdings in ETFs fell in April but recovered in May and June. The recovery continued into July with combined holdings in all gold ETFs passing through the 1,000 tonne mark. "Despite this, consumers are continuing to spend more money on gold, even if they no longer get as much of it. This reinforces the positive attitude and buying intentions of consumers, and indicates that, despite price increases, gold demand remains robust," said Burton. The supply of gold was 1% higher in Q2 2008 than a year earlier. A 13% increase in scrap due to the higher gold price was more than offset by lower central bank sales. Mine output remained constrained, falling 4% on Q2 2007 levels to 590 tonnes. "Investment for the quarter was affected by profit taking, but we also saw a surge in investment demand in several markets that are feeling exposed to the economic downturn. It is pleasing that combined holdings in gold ETFs, first introduced by the World Gold Council in 2003, have now passed the 1,000 tonne mark," Burton said. http://jckindia.com/Jewelry/News/Indian_retail_investment_fall_by_41/3/2/1/2081.aspx
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