Gold demand on the rise in Pacific Rim markets

Gold demand in major developing markets in the Pacific Rim rose 10% to a record 98.4 tonnes during the first quarter of 1994 — a 10% rise over the same quarter last year, the World Gold Council reports.

The council says gold demand in Singapore, Malaysia, South Korea, Thailand and Indonesia rose 15% from 85.6 tonnes in the previous quarter despite the higher price, Agence France Presse reports.

South Korean consumption rose at the fastest rate of 26% to 24 tonnes and Indonesian demand rose 14% to 23 tonnes over the same period last year. The rise in consumption reflected growing interest in gold bars for investment as a haven for stock market profits and brisk jewelry demand during the Lunar New Year and Moslem fasting month.

In greater China, which includes China, Hong Kong and Taiwan, demand adjusted to the higher gold price and Chinese government attempts to cool the economy, and rose 11%, to 103.3 tonnes from the last quarter of 1993. China’s demand was estimated at 50 tonnes, up 9% from 46 tonnes in the final quarter of 1993, despite a 10% consumption tax imposed on gold jewelry from Jan. 1, which raised wholesale prices by 12% and retail prices by 8%. General retail sales in China were projected to grow by 20-30% this year in the coastal and city areas and by 15% in rural areas, the council said. In Hong Kong, demand for gold jewelry, bars and coins rose 18% to 12.3 tonnes in the first quarter from 10.4 tonnes in the previous quarter. Taiwanese consumption rose 11% to 41 tonnes from 36.9 tonnes during the same period.

In India, last year’s leading gold consumer, demand fell 21% to 82.5 tonnes in the first quarter from 105.3 tonnes in the last quarter of 1993, and was down 46% from 153.1 tonnes in the same period a year ago.

The council said there was a dampening of trade demand, evident from the third quarter of 1993, following high purchases in the wake of the liberalization of India’s gold market and falling prices throughout 1992 and early 1993.