Dubai: While investors are dumping “paper gold” in the form of exchange traded funds, people have shown an increased appetite for the physical metal.
As the statistics released by World Gold Council would show, goldbugs are beefing up their stocks of bars, coins and jewellery amid the price decline.
Worldwide demand for bars and coins went up from 342.5 tonnes in the first quarter of 2012 to 377.7 tonnes in the same period this year. Gold jewellery demand increased from 490.8 tonnes to 551 tonnes during the same period.
“The fundamental reasons for holding gold among this community are unchanged over time. They value gold for its role in preserving wealth and hedging against inflation over the long term,” the World Gold Council said.
On the jewellery front, Indians and Chinese led the buying frenzy, contributing a combined 62 per cent of the first quarter global jewellery demand. Gold purchases were particularly upbeat during the Chinese New Year and, in the case of Indians, purchases were driven by preparations for the April wedding season.
In the Middle East and Turkey, demand for gold jewellery registered a 4 per cent increase. “Growth in the UAE largely represented purchases of 22-carat gold among expatriate Indian consumers, while improvements in other markets across the region were predominantly indicative of a positive response to the declining gold price,” said the report.
