Q2 ’09 experiences plunge in gold demand

The second quarter of 2009 saw the total demand for gold in the UAE plunging 19%, as compared to 31% drop in the first quarter.

The World Gold Council (WGC) specified that Q2 witnessed total demand for gold falling by 18% in the Middle East region to 72 tonnes, as compared to the previous quarter, when total demand hiked 33%.

A fall of 31% was seen in the demand for the investment component to 3.8 tonnes. Furthermore, when compared to Q2 2008, jewellery off-take was 17% below at 68 tonnes; though demand for jewellery rose 37% on the previous quarter, but this was to a significant extent a seasonal improvement.

The biggest decline seen by the UAE was in the Gulf, at 19%, compared with a 17% drop in demand in Saudi Arabia.

Overall gold demand for jewellery and investment in the UAE was 21.5 tonnes during the second quarter, which was lower than the 26.6 tonnes in the same period last year. It should be noted that a hike by 46% was noticed in investment gold purchases; while, on the other hand, a 22% drop during Q2 was seen in global consumption of gold jewellery, which makes up the bulk of the market in the UAE, as compared to the same period last year.

It was in the Q2'09 Gold Demand Trends report where the latest figures were published by the World Gold Council (WGC).

The total identifiable investment demand for gold, which includes exchange traded funds (ETFs) and bars and coins, was clearly displayed in the report, complied independently for WGC by GFMS, the London-based consulting firm.