Gold Breaking All Records

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) August 18, 2011 --

Demand for gold as an investment good fell 17% in the second quarter of 2011 compared to a year earlier. Meanwhile, Asian purchases and anxieties over the state of the global economy will stimulate expenditures on the precious metal this year, according to the World Gold Council. Global demand fell to 919.8 metric tons, down from the “appreciable” 1,107 tons a year earlier, when Europe’s debt crisis increased gold’s popularity. In monetary terms, consumption increased 4.6% to reach $44.5 billion, the second highest figure in history, when the rally began. Purchases in China and India, two of the world’s biggest gold consumers, increased by at least 25%.

The debt problems in Europe and the US, along with anxieties over stalled economic growth, pushed the price of bullion to a record $1,814.95 per ounce on August 11. Holdings in liquid goods reached new records last week at the same time that central banks were building up their reserves for the first time in this generation, when gold is increasing in price for the 11th year in a row – the longest such period of growth since 1920. “China and India were very strong, and this shows that you don’t necessarily need to have strong quarterly investment to see a strong gold market,” said Marcus Grubb, the managing director of investment at the Council in London. “You see that the well-being of households and economic growth are as before very strong in both countries. And you also see that demand for gold is heating up as a result of the economic slump,” he added.

Gold for immediate delivery was trading at $1,784.80 per ounce as of 4:30PM yesterday in London. Average prices were $1,509.22 per quarter, which is 26% higher than a year earlier and 8.8% higher than in the first quarter. Demand in Q2 2010 was the highest it has been since Q3 2008 and is the second highest by amount since 2005, according to the Council’s data.

Investment in the precious metal slipped 37% to 359.4 tons in the last quarter, which indicates that it is clearly overbought. DT Trading analyst reported that although purchases of bullion and gold coins increased 8.9% to 307.7 tons, the growth of purchases via electronic platforms was down. Assets increased by 38.5 tons for the second quarter compared with 276.1 tons a year earlier, according to data compiled by Bloomberg. Private investors already have 2188 more tons of gold products in stock than four of the central banks. Private assets reached a record high of 2,216.8 tons on August 8.

The World Gold Council reported that demand for jewelry went up 6.2% to 442.5 tons per quarter. India and China are responsible for 55% of world purchases. Overall demand on gold went up 38% in India and 25% in China, however, the Council reports that central banks remain the main purchasers of gold.

Overall supply fell 4.5% to 1,058.7 tons in the second quarter compared to a year earlier. DT Trading analysts noted that production from the sources increased 7.5% to 708.8 tons.

DT Trading Limited Analytical Department

brokerage     CFDs     currency trading     forex     futures     offshore investment     securities     Trading Platform