The ongoing financial crisis has had a direct impact on the global gold market in the third quarter of 2007, as safe haven investors spurred record inflows into gold exchange traded funds helping to push total demand to a new record of $20.7bn, up 30% on a year earlier.
A change in demand patterns became evident during the quarter as investors rather than jewellery buyers became the dominant force, according to Gold Demand Trends, released by the World Gold Council.
At 138 tonnes, investment in ETFs and similar products were at a quarterly record, beating even Q4 2004 (113 tonnes) when the world's largest gold ETF, street TRACKS Gold Shares, was launched in New York.
The figures, compiled independently for WGC by GFMS Ltd, showed that jewellery demand was also strong through the quarter, but was heavily impacted in key markets in September as steep rises in price deterred buyers. Despite this, jewellery demand rose by 6% in tonnage terms over Q3 2007 and by 16% in dollar terms.
James Burton, CEO of the World Gold Council, commented: “It is clear that gold's safe haven and hedging characteristics have been a major attraction to investors during this period of instability, greater inflationary fears and a falling dollar. We are delighted to see overall demand for gold rise very strongly on last year.
“Looking forward, we believe that investor interest will remain very strong in the near future and that, as the price stabilises, major gold jewellery buying nations, such as India, China and the Middle East, will quickly adapt to a higher floor in the price.”
marketing@alchempro.com
