Gold's Performance Reflects Continued Challenging Economic Climate

Gold's Performance Reflects Continued Challenging Economic Climate PR Newswire LONDON, August 16, 2012 LONDON, August 16, 2012 /PRNewswire/ -- Global gold demand in Q2 2012 was 990.0 tonnes (t), down 7% from the 1,065.8t in Q2 2011 according to the World Gold Council's Gold Demand Trends report. This dip in demand was partly due to the comparison with exceptional demand last year, and also reflects the challenging global economic climate. In this context, gold performed as expected, acting as both a store of value and a source of liquidity. In value terms gold demand remained relatively stable year on year at US$51.2 billion, compared to US$51.6 billion in Q2 2011. During the quarter, the average price of gold was US$1609.49 per ounce, 7% higher than the average for Q2 2011. The key findings from the report are as follows: In India, investment and jewellery demand fell to 181.3t, down from 294.5t in Q2 2011. At 56.5t, investment demand was less than half the level in Q2 2011. Indian jewellery demand also experienced a noticeable drop to 124.8t, down 30% year-on-year from 179.5t. These marked declines were partly a reflection of the strength of demand in Q2 2011 and also driven by Indian investors taking advantage of the weak rupee against the US dollar. The fluctuations in the exchange rate and the rise in the gold price to records of around Rp30,000/10g in June were compounded by domestic inflation and concerns over a weak monsoon season.