The dollar demand for gold remained above the US$100 billion mark last year for the second year in succession, according to the World Gold Council’s Gold Demand Trends report.
According to the WGC, the “resilience in demand” was achieved in the context of average gold prices of US$972.35 per ounce – 12 percent higher than those in 2008.
“Total identifiable gold demand in tonnage terms fell 11 percent to 3385.8 tonnes during 2009 when compared to the exceptional levels reached in 2008, masking a progressive recovery in jewellery and industrial demand after a weak first quarter and resilient investment demand during the year,” the report said.
Speaking after the release of the report, Aram Shishmanian, the CEO of the WGC, said 2009was a year which provided a clear illustration of the diversity inherent in the global gold market.
“As the year progressed a rebalancing of gold market fundamentals occurred, ensuring that as investment demand came off from the exceptional levels seen in the first quarter, total demand for the year remained robust thanks to a rebound in jewellery and industrial demand,” he said.
“Gold’s broad demand and supply drivers provide a unique balance in the face of economic volatility and uncertainty. This ensures gold retains its intrinsic appeal irrespective of the prevailing market conditions.”
The WGC report also said that western investment demand for gold will remain well underpinned in 2010 regardless of whether the economic recovery gathers momentum or stumbles.
“If the global economy falters, then western investors will continue to look towards gold for its diversification and portfolio insurance properties. Conversely, if the economic recovery becomes more firmly entrenched, then inflation concerns are likely to continue to gain prominence.”