2002

Gold Demand Continues to Slump

Dec. 2002

Gold demand in the third quarter remained below last year’s levels, but the rate of decline decreased to 7%, from the 14% decrease in the first half-year, according to the World Gold Council’s quarterly review, Gold Demand Trends.

In dollar terms, demand was 6% higher than a year earlier, thanks in part to an increase in gold prices. The fall in the dollar value of gold, which started in 1997, appears to have halted.

The immediate cause of the fall in gold demand in tonnage terms during the first nine months of 2002 was the high price and the weak world economy, with an additional factor being the reduction in mining company hedge books during the period, the report states.

All contributed to the reduced levels of gold supply and demand. Buyers, however, are growing accustomed to prices in excess of $300 an ounce (which led to a 10 percent increase in gold demand in dollar terms.)

Jewelry demand in the United States rose 3% despite a significant fall in the luxury goods sector overall, the report states.