World Gold Council reveals the growth of global demand by 11% in first quarter
News: Tariq Sugair
After the decline in gold prices from record highs at 1576 dollars per ounce at the beginning of trading in May (May) the current estimated exceeds $ 100, down to the levels in 1462 dollars an ounce, there have been signs of concern for some investors in the spot markets of the consequences of making gold a hedge against inflationary pressures taking place in many countries around the world, especially emerging countries.
Prices continued to gold in the curve ascending from levels of 681 dollars in October (October 2008), without experiencing a correction strongly reflects the Jinn of profits by investors only once in December (December), 2009, when Gold prices down from levels in 1226 dollars an ounce to the level of 1044 dollars per ounce, before it restores the demand vitality pushing gold prices to new record levels, and these record levels of gold price refers to the survival of investor expectations for continued growth in the rate of inflation over the long term, which is an erosion of the forces of the purchasing power of many consumers around the world.
Continued to gold in the spot markets swinging between its use as a tool to hedge against inflationary pressures, or to resort to it as a safe haven from political developments in the Middle East, which increased the severity of the uncertainty in the global economy's ability to get out of the many obstacles faced to stimulate the economic growth of industrialized countries, and keep up with growth a population that pays the labor force in labor markets, which have not been able to absorb the flow of workers.
The world economy faces the situation not seen since the Great Depression at the beginning of the last century, which coincides inflationary pressures with slowing economic growth, which is getting worse after that the form of higher food and fuel prices eroded the ability of consumer spending in industrialized nations to stimulate other economic sectors, service sector and industry.
The accelerated rise in gold prices to new highs is an unprecedented phenomenon, since the link between the dollar with gold in 1971, a move taken by U.S. President Richard Nixon reduced the ability of the U.S. government to cover the volume of banknotes in circulation with gold of 55 per cent to 22 per cent, which has challenged the ability of the U.S. economy to be bound by pledges to exchange rate stability after the rise in the deficit in the balance of trade in that era.
And form the so-called «Nixon shock» starting phase floating exchange rates to the U.S. dollar, followed by the flotation of the exchange rates of other major currencies. The exchange rate of U.S. dollar steady at $ 35 per ounce of gold, that pushed inflation concerns, as well as the Iranian revolution, which coincided with the entry of the forces of the Soviet Union in Afghanistan, gold prices touching a level of $ 850 an ounce in January (January) of in 1980, but the success of the monetary policies of industrialized countries to rein in inflationary pressures contributed to dispel those fears, and push gold prices to decline to below $ 400 an ounce in a period of more than twenty years, they managed gold prices crossing the $ 400 an ounce in 2003, marked the launching of the ascending curve of spot markets witnessed in recent years.
Although the average price of gold has been rising by about 25 per cent in the first quarter of this year compared to the same period last year, the price of gold has seen a decline temporarily at the beginning of the first quarter of this year, which led to differing reactions from investors about the the survival and the pace of growth in demand for gold steadily.
Contrast this to the investors pay a lot of them to reap the profits, but that the launch of investment funds of India encouraged the flow of new capital contributed to the demand curve to keep the pace of positive.
The report of trends in global demand for gold for the first quarter of 2011, which was released Friday from the World Gold Council, and obtained by «Middle East» a copy of it, that the size of the global demand for gold rose by 11 per cent in the first quarter of 2011 compared to the same period in 2010.
The report said that demand in the first quarter of this year amounted to 981.3 tons of gold, equivalent to a value of 43.7 billion, compared to 881 tonnes in the same period last year.
Demand for bullion coins and a growth of almost 52 per cent as the volume of demand level of 366.4 tonnes of bullion value and amounted to $ 16.3 billion.
He hinted the report of the World Gold Council that the high inflation in many emerging countries and concerns the ability of European countries to improve the status of the credit worthiness of countries affected by financial crisis, as well as the latest developments in the Middle East, encouraged to invest in buying gold as one of the most important financial assets, which resorted to investors through political and economic crises.
And the form of demand from China and India 63 per cent of the growth in demand for jewelry in the first quarter of this year, with continued growth in demand for jewelry by about 7 per cent in the first quarter of 2011, bringing the total of the request to the 556.9 tons of gold was formed, including Jewelry China 142.9 tonnes compared with 206.2 tons of gold in India. And prompted the purchase of gold by a lot of central banks to take gold as an asset by financial investors, as the volume of buying banks of the precious metal 129 tons.
The report described the high volume of central banks buy gold to the need for diversification of financial assets by the emerging countries to raise the efficiency of cash reserves with central banks.
During the last ten years, investments have been associated with gold in China rose steadily, especially after the opening of the Shanghai Stock Exchange for the exchange of gold saw the demand for investment gold rose about 71 per cent in 2010, through the purchase of investments of up to 187.4 tons of gold, which reflects the initiative of investors to take financial assets associated with gold as one of the most important means to hedge against inflationary pressures in emerging markets.
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