jewellery, us dollar drives gold

  1. 22,691 Posts.

    Jewellery, US dollar drives gold

    Friday, February 25, 2005
    STRONG consumer demand continues to underpin the gold market, helping the price of the precious metal hit a seven week high overnight at $US435 an ounce.

    In two separate developments, the World Gold Council in London said jewellery demand jumped by 7% in 2004, while on the markets gold was pushed higher by freshly enthusiastic metal traders.

    The WGC said in its report that jewellery demand in 2004 was around 6% higher than in the previous year with 2673 tonnes of gold being consumed in jewellery production.

    Despite this strong performance, the WGC warned that the outlook for gold jewellery demand in 2005 was not as buoyant as last year because of an expected decline in world economic growth which would suppress demand for jewellery.

    On the markets, gold briefly traded as high as $US435/oz in London before easing on the New York market to close at $US433/oz.

    Concerns about the value of the US dollar, and the WGC's analysis of strong jewellery demand added to the fresh burst of interest in gold which traded up to a peak this year of $437.50/oz in January, and $US456.75/oz in December.

    Dealers said sentiment in the market was good with hedge funds starting to make a return, a pointer to gold possibly surging to higher levels.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.