Demand for jewelry was the biggest contributor to gold demand, accounting for 54 percent of the total. That’s a 17 percent rise despite gold prices jumping 26 percent in many currencies. Gold demand for technology increased 12 percent. Surprisingly, investment demand declined 2 percent as investment in gold ETFs dropped 45 percent. Even with the drop, 2010 was the second-highest year on record in terms of investment demand.
India led the world in gold jewelry demand with more than 745 tons. China was a distant second at just under 400 tons and the U.S. third at 128 tons.While the pace of consumption has slowed in several countries, gold consumption for jewelry remains at elevated levels around the world.
The story behind the rise in demand is one you’ve heard from us before. The WGC’s data is validation that the love trade is firing on all cylinders.
The love trade is significant and unique to gold. People buy gold out of love and those in emerging markets are especially amorous of the metal. In fact, the four strongest markets for gold jewelry demand (India, Hong Kong, China and Russia) accounted for 60 percent of the entire jewelry market in 2010.
The rise in Chinese gold demand goes hand-in-hand with a rise in average incomes for Chinese citizens. Last year, 20 million migrant workers in China saw their incomes rise 24 percent. Compare this to the U.S. where the job market has shown some signs of life, but continues to sputter.
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