Noble metal

The stable price of gold has increased the demand for it

Global demand for gold is growing for the second quarter in a row. Before that, it was falling, but the price was rising. Yesterday the International Gold Council published data on the gold market for the first half of 2007. Global demand in physical terms increased by 11%, to 1.78 thousand tons, while the volume of gold supplies to the market decreased by 4% compared to the same period last year, to 1.664 thousand tons. The growth in demand was strengthened by the jewelry industry, increasing its consumption by 21%, to 1.272 thousand tons (in monetary terms by 36%, to $26.213 billion). Such a high figure is due to the fact that last year jewelers waited out the price rally and worked on warehouse stocks purchased before the price increase. This year, reserves have dried up, but gold prices have stabilized. And even despite fluctuations in the currency and stock markets, gold remained a safe haven and did not give either investors or industrial consumers a significant reason for concern, leaving, however, market speculators without the expected income.

Although experts predicted an increase in gold prices this year, last year's record, when a troy ounce cost $735, was not broken. The maximum was recorded on April 24 - $688.7 per ounce. Having started the year at $640, the price of gold did not leave it for a long time, remaining within the range of $620-680 per ounce. Yesterday the evening fixing in London was $667.25 per ounce. True, the average for the six months was still 6% higher than last year.

In monetary terms, demand for gold in the first half of the year increased by 24% and reached $36.948 billion. Demand from the already active players in the precious metals market: China, India, Turkey and the countries of the Middle East has noticeably increased. At the same time, investment demand for gold decreased by 17%, to 277.3 tons. Industrial consumption increased by 2% to 230.1 tons. The industry has maintained this growth over the past few years.

Significantly, supplies to the secondary gold market decreased by 22%, to 489 tons. At the same time, sales in the official sector increased by 17%, to 256 tons. Gold production also increased by 3%, to 1,208 thousand tons, mainly due to the launch of new projects in Australia, Canada and Asia.

For the first time, the semi-annual report of the International Gold Council presented data on consumer demand for jewelry in Russia. It turned out that Russia ranks seventh in the world in jewelry sales. Moreover, almost 70% of the needs of this market are met by domestic producers. In 2006, the Russian jewelry market absorbed 70 tons of gold and already almost 50 tons in the first half of this year. In the second quarter alone, jewelers increased gold purchases by 27%, to 20.3 tons. This means that its consumption by the jewelry industry in Russia alone may exceed supply from producers: in the first half of the year they extracted and transferred for refining only 55.1 tons of gold.

Anna LANDER