Return
to Story Page
To print: Select File and then Print from your
browser's menu
PTI
Mumbai, Jan 13: Gold demand in the first half of 1999 will remain weak due to substantial inventory build-up and weak economic outlook, Gold Fields Mineral Services Ltd (GFMS) has said in its report +gold survey 1998-update 2+.
Describing 1998 as a +disappointing+ year for gold, managing director of GFMS, Philip Klapwijk said gold price averaged just $294 per ounce last year, which was the lowest level in 20 years.
In a press release, Klapwijk said gold performed poorly as it was increasingly behaving like any other commodity, and its role as hedge against inflation and uncertainty was diminishing.
Despite the east Asian crisis, gold demand held up well last year with east Asia became a net supplier of gold to the international market during the first half of 1998, the report said.
Normally, east Asian demand would instead have provided a floor to the prices at a much higher level of around $300 per troy ounce, but due to absence of this floor, prices had declined to historically low levels.
Total fabrication demand in 1998 was held up primarily due to increased jewellery demand from India, Europe and north America with India's offtake alone accounting for over 800 tonnes, the report said.
Total gold supply declined by less than two per cent during 1998, but its composition changed dramatically from the previous year. More than 1,000 tonnes of gold came into the market last year, primarily from the east Asian countries like Indonesia, Korea and Thailand.
Mine production rose by 57 tonnes to reach a new record level of 2,529 tonnes last year, although the growth rate had slowed noticeably from the previous year, GFMS said.
Looking at supply, GFMS suggested that the official sector (in the form of sales and lending) would continue to constrain the market on the upside. Mine production costs have plummeted in the past year. The implications were that mining companies can maintain production levels for the future and secondly, that further hedging could be done even at current prices as the margin.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------