World Gold Council Says Demand Robust In 1Q '11, Up 11% From 1Q '10

Thw World Gold Council released its survey of the gold market for the first quarter of this year, which shows gold demand rising 11% on a tonnage basis. Mainland China was the hottest nation for gold demand.

China’s consumption surged 47 percent in the quarter and may double before 2020 as the growing population’s wealth increases and near-term concerns about faster inflation spur investment, the council predicts....

Investment “demand will remain resilient in 2011,” Eily Ong, an investment research manager at the council, said in an interview from London yesterday. “Jewelry demand is remarkable. We still see inflation pressures and that has driven the Chinese investors.”

Jewelry demand increased 6.8%, investment demand increased 26%, bar and coin purchases increased 52%. ETF investment declined, making for an anomaly. Offical-sector purchases, comprising central naks and government agencies, doubled.

Supply decreased by 4.4% because of declines in scrap sales and official-sector purchases. Supply from mines rose 7%.