Gold demand falls 34 percent in Q3: WGC

• Source: Global Times
• [01:31 November 20 2009]
• Comments

Gold demand fell 34 percent in the third quarter as high prices weighed on investment flows and led to a slump in jewelry buying in key markets like India and the Middle East, a World Gold Council (WGC) report showed Thursday.

But speculation in gold futures and expectations for more official-sector bullion buying are keeping prices elevated despite a dearth of physical demand, according to the WGC's investment research manager Rozanna Wozniak.

"For most of last year, the buying was very physical," Wozniak said. "(Now), it seems to be more financial market-driven, by some of those other less visible instruments – derivatives, futures, over-the-counter transactions."

"In terms of why it is happening, we have had some good news from the central bank sector, as well as the fall in the US dollar," she said. "That says something about potential future demand."