JEDDAH: Consumer demand for jewelry grew by a mere 7 percent to 556.9 tons from 521.3 tons, while the demand for bars and coin investments grew by a whopping 52 percent, the latest World Gold Council data showed. Investments in bars and coins at the end of first quarter 2011 stood at 366.4 tons from around 241 tons in the year-ago period or an increase of 126 tons in 12 months. However, the demand for gold jewelry rose only to 36 tons. India and China, the two largest markets for gold jewelry, together accounted for 349.1 tons or 63 percent of the total jewelry demand. WGC said Middle East saw 10 percent growth in bars and coins as against 16 percent fall in gold jewelry in first quarter of 2011. Saudi Arabia saw 6 percent rise in bars and coin demand while at the same time jewelry demand fell by 19 percent. UAE too saw 21 percent growth in bars and coins investments while jewelry demand grew by just 5 percent. In Europe, bar and coin investments across countries such as France (131 percent growth), Germany (103 percent) and Switzerland (117 percent) reflected Asian trends, although the demand of gold jewelry is negligible in these countries. Albert Cheng, MD, Far East at the WGC, said "Chinese appetite for gold has increased rapidly over the past few years. In March 2010, we predicted that gold demand in China would double by 2020, however, we believe that this doubling may in fact be achieved sooner. Increasing prosperity in the world's most populous country coupled with their high affinity for gold will serve to drive demand in the long-term. Near term inflationary expectations are likely to support the investment case for gold." Jewelry, according to WGC, includes all newly made jewelry and gold watches while the demand of bars and coins comprises individual purchases. The trend of more consumer demand for gold bars and coins over gold jewelry was evident across nations, excluding India, South Korea and Hong Kong. In India, jewelry grew by 12 per cent as compared to a lower 8 percent growth for bars and coins. In China, jewelry demand saw a robust 21 percent growth to 152 tons but bars and coins investment ballooned 128 percent to 93.5 percent. In China, the growth in demand for jewelry was a similar 21 percent but demand for bars and coins was 123 percent. In Indonesia, the growth in demand for bars and coins (66 percent) is clearly more than jewelry (8 percent). Thailand in fact saw a 38 per cent growth in bars and coins demand while jewelry saw a fall in demand by 16 percent.
