And if the figures released last week by the Geneva-based World Gold Council are any indication, then gold is still a safe investment avenue.

The demand for gold from developed markets was 16 per cent ahead of the corresponding period of 1997. Disillusioned by the turbulent stock markets after the contagion effect of the year-long economic and financial crisis that began in Southeast Asian countries, investors are returning to gold.

"The most significant development in the third quarter was a continued increase in the demand for gold as an investment," said WGC's manager, George Milling-Stanley. "All over the world, investors are looking for ways to preserve their wealth, and increasingly those investors are starting to turn to gold. This growth in investment demand has been increasingly apparent over the past several quarters, and the revival has spread to countries as diverse asIndonesia, Saudi Arabia, Vietnam, the US and Japan."

Demand in the 25 key markets for gold consumption monitored by the WGC totalled 1,712.2 tonnes in the first three quarters of 1998. The performance for the year to date represented a decline of 20 per cent from the same stage of last year, but this should not be allowed to mask the fact that there has been a steady improvement in gold consumption statistics as the year progressed.

At the close of the first quarter, when the worst impact of the Asian economic and currency crisis was felt, gold consumption was running 46 per cent behind the 1997-level. After the first half, consumption was still 29 per cent below the same stage of last year. Demand in the third quarter was just one per cent behind that for the same period of 1997, when the first effects of the Asian crisis was starting to become apparent.

The recent performance of the 10 largest consumer markets, each of which accounted for more than 100 tonnes of gold demand in 1997, is shown in theadjoining table. The most significant changes in Q3 were:

-The demand in India was 171.8 tonnes, eight per cent below the record level of Q3 in 1997, reflecting the economic uncertainty and the decrease in consumers' disposable income following the surge in the prices of necessities;

-In the US, demand rose 19 per cent to 113.5 tonnes, helped by near-record coin sales;

-In China, demand fell 12 per cent to 43.1 tonnes in response to the devastating floods in the Yangtze basin and several adverse socio-economic developments;

-Rising investment lifted total demand in Saudi Arabia to 49.1 tonnes, 29 per cent above Q397 levels.

-Demand in Japan rose 31 per cent to 21 tonnes following a surge in investment towards the end of the period.

-In Latin America, offtake amounted to 25 tonnes, six per cent higher than a year earlier. Despite its economic troubles, demand was strong in Brazil but it was weaker in Mexico.

Says a WGC note: The market is now running into what is traditionally thestrongest period of the year for gold. The India festival and wedding season is well underway, Christmas should provide the usual boost to demand in the west, and buying should soon start to pick up among Chinese communities around the world ahead of the Lunar New Year. The outlook is for the recovery to continue over the remainder of the year. What is more, investment demand (based on bullion coin sales mainly into Germany) was buoyant. Coin sales totalled 4.8 tonnes, 32 per cent higher than in Q3of 1997. Jewellery demand at 68.5 tonnes in Q3 of 1998 was seven per cent higher than the previous year's Q3.