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Gold Investment Remains Strong, Jewelry Demand Weak -AngloGold55 days ago
JOHANNESBURG (Dow Jones)--Global investment in gold remains strong and the market has stayed buoyant despite the rising price of the metal, helping to offset depressed demand for jewelry in all major markets outside of China, AngloGold Ashanti Ltd. (AU) said Monday.
Investment purchases in India have been rising in major cities, while in the Middle East bar and coin sales in many of the Gulf states are up 7%, the Johannesburg-based company said.
New-coin minting in Turkey rose to 11 metric tons in July and August, and the third quarter will show growth quarter-on-quarter, though levels won't match those of the same period last year, AngloGold said. The U.S. market continues to experience robust investment demand, with bar, coin and exchange-traded fund demand still rising.
AngloGold, the world's third-largest producer of the metal, produced 1.187 million troy ounces in the third quarter of the year, up from 1.127 million ounces in the preceding quarter.
India's physical gold market remains under pressure after 20% gains over the past year in the rupee-denominated gold price, the company said. Between June and September, gold jewelry consumption fell 22% compared with the same period a year earlier.
Scrap activity during the third quarter was slight, as the market appeared to anticipate further gold price increases, AngloGold said.
However, the impact of the global recession on China's gold market has remained milder than in all other major economies. Demand for traditional 24 carat gold jewelry continues to grow compared with year-earlier periods, showing that the investment case for pure gold jewelry continues to hold sway with the Chinese consumer, the company said.
The U.S. gold jewelry market has continued its quarter-on-quarter decline as jewelry still leads the list of discretionary spending items cut during the recession, it said.
Major players through the retail value chain continue to close outlets or file for bankruptcy protection, although closures and forced consolidation may help the jewelry industry recover more quickly and remain stronger once the recession ends, AngloGold said.
The jewelry sector in the Middle East remained under pressure in the third quarter. Egypt, which had been bucking negative trends in the first half of the year, saw an 8%-10% decrease in third-quarter jewelry sales from a year earlier, it said. Third-quarter demand in Saudi Arabia fell 25%-30%, while in the United Arab Emirates an anticipated recovery didn't materialize with jewelry tonnage down 20%-23%.
-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848; robb.stewart@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=GFPcX21DRDAiIe%2FPoNtcig%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 02, 2009 01:54 ET (06:54 GMT)
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