Gold stocks set to rise again: This year's demand could approach record levels of in 1992
This positive news for the gold came as the council reported demand in the third quarter was 4 per cent down on a year earlier, when sales were high because of burgeoning demand from developing country markets.
An important part of the demand in late 1992 was due to stocking up by wholesalers taking advantage of the then low price, which fell to touch a seven-year low of dollars 327 an ounce early this year compared with a peak of around dollars 400 and yesterday's level of dollars 378.5.
The price shot up in the spring against a background of market enthusiasm for gold as investors such as Sir James Goldsmith and George Soros revealed they had been buying.
But while that was going on gold wholesalers, particularly in Asia, appear to have shied away from buying at high prices and supplied their customers from stock.
The council - which represents the main gold-producing companies - now expects wholesalers' stocks to rise again in the fourth quarter of this year.
Roger Murphy, general manager of the World Gold Council's gold economic service, said it was quite likely gold demand in 1993 could approach the record levels of 1992 if the performance so far continued in the fourth quarter.
He added: 'The fourth-quarter data will be very important for the total annual figure as it includes Christmas and Far East present buying demand.'
The council said demand was up 6 per cent in the first nine months of the year compared with a year earlier, though third-quarter demand was 4 per cent lower than the unusually high level in the same period of 1992.
In Asia, the Middle East and India, where gold demand is highly sensitive to price changes, demand was down 15 per cent in the third quarter but 6 per cent up year-on-year.
Consumer demand in Asia has been much more resilient than gold imports, which have been hit by the drop in purchases by wholesalers.
Joni Lai, a council executive based in China, said that early this year there was heavy demand for gold for investment at a time when inflation was 35 per cent.
The austerity programme brought in by the Chinese government had reduced inflation to 20 per cent. This was enough to switch purchasing from investment into luxuries such as jewellery.
Overall gold imports into Asia were 28 per cent down for the first three quarters of 1993, but consumer demand rose 4 per cent as purchases held up.
Japanese investment demand was boosted by a coin issue for a royal wedding, which absorbed 36 tonnes of gold in September.
Other highlights from the quarterly survey were accelerating demand in the US for gold jewellery - up 10 per cent in the third quarter - and for gold bullion coins, which almost doubled in the year so far, and a 36 per cent rise in gold demand in Turkey.
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