Global gold demand in the first quarter of 2011 increased 11% year-over-year to 981.3 tons due to turmoil in global markets and gold prices reaching all-time highs. India and China accounted for 41% of total demand. Meanwhile, gold supply declined 4% to 872.2 tons from the prior year due to a 6% drop in recycled gold. Factors driving increased gold demand and higher prices included a weakening US dollar, massive government deficits fueling inflation concerns, and rising investment demand for gold as a hedge.

2. Price/Troy Ounce (USD)
1,550.0
1,500.0
1,450.0
1,400.0
1,350.0 Price/Troy Ounce (USD)
1,300.0
1,250.0
Source: www.goldprice.org

3.  Gold Global Demand (1st quarter of 2011) =
981.3 tons, up by 11% year-on-year from 881
tons in 1st quarter of 2010
 Global Turmoil – Gold prices on all time high
& Gold demand for ETF’s doubled
 41% of demand from India & China
 Investment demand remains strong

4.  Supply declined by 4% to 872.2 tons from
912.1 tons in the 1st quarter of 2010
 Decline was due to recycled gold, which was
down 6% on year- earlier levels to 347.5
tonnes from 369.3 tonnes in the first quarter
of 2010
 Supply has averaged approx 2,497 tons per
year over the last several years

5.  Collapse of the U.S dollar
 Gold returning to historic role as money
 No other world currencies offer refuge
 Massive deficits resulting in hyper-inflation
 Invest Demand for gold rapidly rising
 Gold is in an established powerful bull market
 Relatively smaller size of the gold market
 Large short positions (Speculation)

6.  Culture of several countries
 Hedge against inflationary wealth loss
 Investment Diversification
 Prosperity
 Central Bank Reserves
 High Inflation
 U.S Dollar
 Low Interest Rates

7.  Lack of exploration of
gold
 Change in Technology
 Increase in the stretch
of demand of gold
 Miners are holding
reserves of gold to clear their hedge books
 Downfall in world economy & excessive
inflation