Issue No. 35 - May 2001

NEWS RELEASE - 24 May 2001
(not before 3.00 p.m. BST)

Gold demand rises 5% in Q1

London: 24 May 24, 2001 - The first quarter of 2001 saw further healthy growth in gold demand, according to data published today by the World Gold Council. Demand for gold jewellery and personal investment in the world's 27 leading gold consuming countries rose to 826 tonnes. This was 5% higher than demand in the first quarter of 2000 and set a new first quarter record.

The upward trend in jewellery demand remained firm with consumption 6% higher at 735 tonnes (also a new record for the first quarter of the year). In contrast, investment demand remained subdued, falling 3% from a year earlier to 91 tonnes.

There was a strong rise in Indian consumption which at 243 tonnes was 23% higher than the depressed first quarter of 2000, leading to a 26% increase in official imports. Demand was boosted by a buoyant season of marriages and festivals and by retailers restocking after a period of good sales.

New first quarter records for gold consumption were set in the United Arab Emirates, up 17% year on year, and in Mexico, up 10%. US gold jewellery sales also turned in a strong performance, aided by the fashion swing back to chunky yellow-gold items and by some consumers, concerned over economic slowdown, cutting back on more expensive stone-set items in favour of plain gold. The swing to yellow gold also boosted jewellery demand in Japan which was 19% higher than a year earlier.

Together with smaller increases in some other markets, these results more than compensated for sharp falls in demand in Turkey and Taiwan, down 38% and 31% respectively as a result of economic difficulties, and for the continued weakness in investment demand.

Commenting on the figures, Haruko Fukuda, Chief Executive Officer of the World Gold Council, said: "This is an encouraging start to the year. I am particularly pleased to see the strong demand in India, the world's largest gold market, and the way in which US gold jewellery demand has grown despite the signs of economic slowdown.

"In the immediate future, economic slowdown may dampen growth in the USA and some other markets, but the underlying trend in gold jewellery consumption is strong. With the additional promotional funds which the industry is providing and the fashion swing back to yellow gold, I am confident that we shall see continued healthy demand in the future."

-Ends-

For more information contact:

Jill Leyland
WGC London Tel: + 44 (0)20 7766-2709; Fax: + 44 (0)20 7839-6561 jill.leyland@wgclon.gold.org

Gold Demand Trends No. 35 is available from the day of publication on the Council's website www.gold.org.

Hard copies of the GDT document can be obtained from the:
World Gold Council, 45 Pall Mall, London SW1Y 5JG
(Tel: 020 7930 5171 Fax: 020 7839 6561)

or a PDF file can be downloaded from the website or obtained by e-mail from matthew.turner@wgclon.gold.org