Gold demand in India, the world’s largest buyer, is heading for a quarterly record after prices slumped to a two-year low in April, the World Gold Council said.
India’s gold imports will be 300 to 400 metric tons in the second quarter, almost half total shipments for all of last year, the London-based industry group said in a report. Gold auctions run by the State Bank of Vietnam were fully subscribed and some retailers in Japan ran out of stock, it said.
Investors sold 477.7 metric tons valued at about $21 billion from exchange-traded products this year as some lost faith in gold as a store of value amid an improving U.S. economy and rally in equities. The slump into a bear market last month boosted demand for jewelry from Asia and spurred greater coin purchases, with the U.S. Mint saying April 23 that it ran out of its smallest gold items. Prices are 27 percent below the record $1,921.15 an ounce set in September 2011.
“This report leads us to conclude that Asian markets will see record quarterly totals of gold demand in the second quarter,” Marcus Grubb, managing director of investment research at the council, said in the report dated today. “Even if ETF outflows continue in the U.S., it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold.”
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Dean Popplewell
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