ExpressIndia Web Home > Top Stories > Business Saturday, May 06, 2006 Business Indian demand belies surging gold prices Reuters Posted online: Saturday, May 06, 2006 at 1818 hours IST Lima, Peru, May 6: Soaring bullion prices are unlikely to end rising demand for gold as the jewelry industry in India, newly found investor interest and medicinal uses all continue to defy expansion forecasts, a top gold official said on Friday. Global gold demand likely fell in the first three months of this year, but should rise in the second quarter as consumers adjust to soaring gold prices and place their faith in the enduring value of the precious metal again, George Milling-Stanley of the World Gold Council said in an interview on the sidelines of a gold symposium in Lima, Peru. Gold prices are rocketing as investors look to bullion as a safe-haven against instability in the Middle East, a weak US dollar, concerns over Iran's nuclear ambitions, high oil prices and global inflation. But that has not choked off demand, which rose 5 per cent to 4,036 tonnes in 2005, according to independent precious metals consultancy GFMS. More Business Headlines People who read this story also read Thousands march through Hyderabad to protest ADB projects 06.05.06 Growth dependent on economic reforms: FM 06.05.06 FM sees real estate lending moderating 05.05.06 PM pegs India’s infrastructure needs at $150 bn 05.05.06 Tata offers to raise Bangladesh investment: Govt 30.04.06 Full Coverage Terror hits Varanasi Indo-US Nuke Deal SelectJustice for JessicaBihar PollsSave BangaloreMumbai FloodsDay in PicsDiscovery in SpaceRam Temple TurmoilJustice for ImranaWimbledon 2005Advani's resignationBollywood icon: Sunil DuttSamrat Shah RukhOne Year of UPA RuleThe Great Indian DebateParveen Babi's DeathNRI NewsKanchi Seer's ArrestAmbani vs AmbaniGujarat RiotsJ-K MonitorIndia Pak TalksIndia-Aus SeriesIndia-Pak SeriesIslamabad SummitIndia Down UnderWar on IraqNE MonitorIndia-Pak Face OffPak Nuke LeakElections 2003 "When we look at first-quarter statistics we will see that demand has fallen, probably considerably, especially in the price sensitive markets, India, parts of the Middle East and parts of Southeast Asia," Milling-Stanley said. "In the second quarter of the year, there are just a few signs that it may be that consumers are beginning to adjust to the new, higher price level," he said. Gold prices are seen continuing to rise over the coming months as demand strengthens again, led by jewelry demand from No 1 consumer India and as investment fund interest booms. The World Gold Council said earlier this week it saw prices for gold, also used in industry, challenging the $850/ounce level within the next 18 months. Others are setting their sights to well over $1,000 per ounce. Indian demand belies surging gold prices And contrary to popular logic, gold pundits say higher prices rarely hold off buyers for very long, with most even holding higher-priced purchases in higher regard. "The private sector is making the decision to move into gold," said Milling-Stanley. GOLD AT THE NANO LEVEL He added that gold has unique characteristics when broken down to the nano level which allow it be used to do everything from combat diseases to make it easier to make flat-screens on items like mobile phones more readable. Gold production in 2005 was about 2,519 tonnes, outstripped by demand by the jewelry sector alone by some 2,712 tonnes. Jewelry sales rose 3.8 per cent in 2005 compared to the year-earlier period. In India, whose jewelry demand powers much of gold purchases, gold consumption soared above 600 tonnes in 2005, compared to about 250 tonnes in 1990. "Definitely, demand will continue to grow," said Paul Walker, the chief executive of GFMS. The pace of demand will be determined by how much further prices rise and at what rate. "There's no way to put a time on it, because we've never seen a market quite like this," said Milling-Stanley. More Business HeadlinesGrowth dependent on economic reforms: FMFM sees real estate lending moderatingSC admits Reliance plea against HC orderPM pegs India’s infrastructure needs at $150 bnReliance Comm to offer stock overseasDiscussion on fuel price hike next week | Ads By Google Gold & Silver Bullion Gold, Silver & Platinum bullion for delivery or storage. Est 1960. www.goldline.com Buy Gold At A Discount 800-346-2880 low commissions Don't pay high commissions www.inexpensivegold.com Silver Bullion Investing New report: Silver Bullion/Precious Metals Investing Forecast for 2006 www.investmentu.com Gold Bullion Buy American Eagle, Krugerrand, or Maple Leaf gold coins online 24/7. www.BlanchardOnline.com Your comment[s] on this article Be the first to comment on this story. Top About Us | Advertise With Us | Privacy Policy | Feedback | Site Map © 2006: Indian Express Newspapers (Mumbai) Ltd. All rights reserved throughout the world. 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