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India's gold demand up by 1 per cent in Q1

Gold demand in India grew one per cent in the first quarter of 2000 at 197.8 tonne due to brisk consumption in January and March.

Demand in February was affected by price-volatility. Demand during the quarter was buoyant with price around $ 280 per ounce, but consumers hesitated to buy at higher prices in case the price fell back again, the World Gold Council's quarterly survey Gold Demand Trends revealed.

Global gold demand remained strong during the first quarter of 2000, the World Gold Council said. The demand of 795.2 tonne maintained the level of demand during the first quarter of 1999.

A robust economy with a forecast for higher gross domestic product, or GDP, growth in the current fiscal, a buoyant stock market, all-round industrial growth, continuing economic reform and the vibrant software sector are cited by the report as positive indicators for a good demand for gold in India.

The report expects the rural demand to hold up well this year in anticipation of a good monsoon as seen through the decade.

Derrick Macheda, regional director-India, World Gold Council, said, "The projected growth of the Indian economy augurs well for gold demand in the country. Overall, we anticipate a good monsoon to provide the necessary boost to agricultural production thus improving rural incomes. To a certain extent this may offset the impact of the drought prevailing in certain pockets of the country."

Official Indian gold imports in the first quarter totalled 135.2 tonne, three per cent higher than the corresponding period last year. Gold imports saw a drop in the month of February as banks stopped importing during the last week ahead of an anticipated reduction in import duty in the budget on February 29.

Global demand for jewellery was 701 tonne, 7.5 tonne above the first quarter of 1999 and a record for the period. Consumption was buoyant in many countries, helped by the improving global economy.

The demand for gold as an investment was 94.2 tonne, 29 per cent below the level of a year age, with a sharp fall in sales of new coins in the US accounting for almost all the decline. US coin sales last year were exceptionally high on Y2K concerns. Elsewhere in the world, investment demand was virtually unchanged.

UNI

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