Demand in India was 5% higher in tonnage terms in Q3 than one year earlier, a slowdown from the rapid pace in the first half of the year. Demand was very strong in the first two months but then faded as the price started to climb in September, impacting on demand for gold in the run up to Diwali.
By way of contrast, there was no slowdown in demand in Mainland China where Q3 brought a further 25% increase in demand compared to Q3 2006. The rise in the price in September was evidently less of a deterrent to Chinese buyers.
Demand remained strong throughout the Middle East, increasing by 19% in Saudi Arabia, 10% in UAE, 15% in Egypt and 3% in other Gulf countries combined.
Strong economies in the Arabian Peninsula and a recovering economy in Egypt, together with the favourable price environment for jewellery buying in the first two months of the quarter, easily outweighed the negative impact of the price rise in September.
In Turkey, an all-time record demand at 86.3 tonnes was reached in Q3. Net retail investment was a third quarter record, while gold jewellery demand for the quarter was the second highest quarter ever.
A combination of increased purchasing power, an appreciation of the lira against the dollar helping to keep local prices stable, and political tensions all supported demand.
US jewellery demand fell by 13% from year-earlier levels due to the impact of a slowing economy on demand for main stream articles combined with the high gold price. However, high- and midmarket demand for gold jewellery remained brisk.
Russian jewellery demand continued to soar rising to 22.4 tonnes in Q3, 23% higher than a year earlier, with rising consumer incomes and a rapidly improving retail environment both key factors.
Industrial and dental demand in Q3 was relatively subdued, rising just 1% to 116 tonnes, little changed from year-earlier levels. Gold's largest industrial market in electronics was affected by an oversupply of semi-conductors and integrated circuits at the beginning of the quarter.
marketing@alchempro.com
