21 May 2009

Demand for gold up, but not for jewellery

5:33 am on 21 May 2009

Demand for gold is soaring among investors, but consumers are shunning gold jewellery.

The World Gold Council says total demand for gold reached 1016 tonnes in the first three months of 2009 - up 38% from a year ago. Demand for gold as an investment rose 248% to 596 tonnes.

The BBC reports gold is often seen as a safer investment in times of turmoil, and a way to guard against future inflation.

But demand for gold jewellery fell 24%. The council says consumer spending on non-essential items such as jewellery have been hit by the recession.

Industrial demand for gold, which is used in the production of electronics like laptops and mobile phones, fell by 31% from the first quarter of 2008.

The gold price has risen from about $US700 per ounce in November last year to above $US900 per ounce.