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The supply of gold was 1% higher in Q2 2008 than a year earlier. A 13% increase in scrap due to
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30% of MMO Players Buy or Sell Gold

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30% of MMO Players Buy or Sell Gold

  1. 1. www.gold.org Embargo: Not for release before Wednesday, 13 August, 07.00AM (New York) 12.00PM (UK) PRESS RELEASE 13 August, 2008 GOLD DEMAND HITS RECORD VALUE LEVELS IN Q2’08 BUT VOLUME SUFFERS DUE TO HIGH AND VOLATILE GOLD PRICES At US$21.2bn, global dollar demand for gold reached new heights in the second quarter of 2008, rising 9% on year earlier levels. Global investment demand for gold showed the strongest surge, reaching $3.5 billion in Q2 2008, 29% higher than Q2 2007, with particular strength in the US, China, Egypt and Vietnam. However, with a decrease of 19% on Q2’07 to 735.6 tonnes, the continued high and volatile price of gold dampened total demand in tonnage terms during the quarter, according to Gold Demand Trends, which is released today by World Gold Council (WGC). The report shows that this particularly impinged on jewellery demand, which fell 24% to 504 tonnes and was also affected by tightened consumer spending due to the global credit squeeze and growing inflationary pressures. Markets which saw the largest decline in jewellery demand were India, which fell 47% to 118 tonnes, and the US which fell 30% to 33 tonnes. However, positive news came from China and Egypt, which saw a 2% and 8% increase in jewellery demand respectively. Despite a number of markets turning to gold due to its investment attributes as a safe haven in times of rising inflation and unstable equity markets, identifiable global investment demand in tonnage terms was down by 4% over Q2 2007 to 119.8 tonnes, as some investors took profits. This decline represents a 9% decrease in net retail investment, which was partly offset by a move to positive net investment in Exchange Traded Funds (ETFs) and similar products. Holdings in ETFs fell in April but recovered in May and June. The recovery continued into July with combined holdings in all gold ETFs passing through the 1,000 tonne mark. Trends in retail investment demand differed significantly from market to market. There were strong increases compared to the previous year in China, the US and Vietnam fuelled by concerns over the general economic climate, inflation and stock market falls. In India, however, retail investment followed the same trend as the jewellery market, falling 41% to 43.4 tonnes, as investors were deterred by price volatility and as inflation reduced funds available for saving. Industrial and dental demand declined by 5% on year earlier levels to 111.8 tonnes, primarily due to declining demand for gold in the dental and ‘other industrial’ sectors, which fell in response to the continued high gold price. In value terms, demand was equivalent to $3.2bn, a rise of 27%. James Burton, CEO of World Gold Council, said: “As expected, the continued high and volatile gold price, together with economies across the globe witnessing inflationary pressures and a tightening of consumer wallets, dampened consumer demand for gold in tonnage terms during the quarter. “Despite this, consumers are continuing to spend more money on gold, even if they no longer get as much of it. This reinforces the positive attitude and buying intentions of consumers, and indicates that, despite price increases, gold demand remains robust. “Investment for the quarter was affected by profit taking, but we also saw a surge in investment demand in several markets that are feeling exposed to the economic downturn. It is pleasing that combined holdings in gold ETFs, first introduced by the World Gold Council in 2003, have now passed the 1,000 tonne mark.”
  2. 2. www.gold.org The supply of gold was 1% higher in Q2 2008 than a year earlier. A 13% increase in scrap due to the higher gold price was more than offset by lower central bank sales. Mine output remained constrained, falling 4% on Q2 2007 levels to 590 tonnes. Gold Demand Trends figures are compiled independently for World Gold Council by GFMS Limited. The full Q2 2008 report can be viewed at: http://www.research.gold.org/gold_demand_trends/ ENDS For further information and to receive country reports or the full Gold Demand Trends: Matt Graydon, Head of External Relations, World Gold Council, on + 44 (0)207 826 4716, or email matt.graydon@gold.org Rebecca Clark, Capital MS&L on + 44 (0) 207 307 5342, or email rebecca.clark@capitalmsl.com George Milling-Stanley, Director, Official Sector, World Gold Council, on +1 212 317 3848, or email george.milling-stanley@gold.org Notes to Editors: World Gold Council The World Gold Council (WGC), a commercially-driven marketing organisation, is funded by the world’s leading gold mining companies. A global advocate for gold, the WGC aims to promote the demand for gold in all its forms through marketing activities in major international markets. For further information visit www.gold.org. GFMS Ltd GFMS Ltd is an independently owned precious metals consultancy, specialising in research into the global gold, silver, platinum and palladium markets. GFMS is based in London, UK, but has representation in Australia, China, India and Russia, and a vast range of contacts and associates across the world. For further information visit www.gfms.co.uk. © 2008 The World Gold Council and GFMS Ltd. All rights reserved. This document is World Gold Council (WGC) commentary and analysis based on gold supply and demand statistics compiled by GFMS Ltd for the WGC along with some additional data. See individual tables and charts for specific source information. No organisation or individual is permitted to disseminate the statistics relating to gold supply and demand in this report without the written agreement of both copyright owners. However, the use of these statistics is permitted for review and commentary (including media commentary), subject to the two pre-conditions that follow. The first pre-condition is that only limited data extracts be used. The second precondition is that all use of these statistics is accompanied by a clear acknowledgement of their source, that being GFMS Ltd and, where appropriate, the WGC. Brief extracts from the commentary and other WGC material are permitted provided WGC is cited as the source. Whilst every effort has been made to ensure the accuracy of the information in this document, neither the WGC nor GFMS Ltd can guarantee such accuracy. Furthermore, the material contained herewith has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient or organisation. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell gold, any gold-related products, commodities, securities or related financial instruments. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. The WGC and GFMS Ltd do not accept responsibility for any losses or damages arising directly, or indirectly, from the use of this document.

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