|ORO Y PLATA INTERNACIONAL S.A.
China Gold Demand at One-third Norm
Due to Record Prices
10/02/08. Dow Jones, LONDON: Chinese gold jewelry orders are around
one third of usual levels as a result of volatile prices, AngloGold Ashanti,
the world's third-largest gold producer, said Thursday.
"In China, manufacturers have reported orders at only one third of typical
levels for this time of year," the company said.
"A major concern is that retailers, particularly those in price-sensitive
markets, will only restock slowly, amidst concerns that gold prices may
continue to show the volatility exhibited in the first part of the fourth
quarter," AngloGold added.
Chinese gold jewelry consumption had been steady through 2007, with
good demand for high-end jewelry, but the middle- and mass-market
retailers were hit by a general drop in retail sales.
A similar picture was seen elsewhere, AngloGold said. Having performed
well in the first half of 2007, jewelry demand suffered particularly in
traditional markets such as the Middle East and India.
Gold jewelry consumers in the Middle East were hit as local currencies are
linked to the dollar, while inflationary concerns and escalating rents
"dampened gold purchases considerably," AngloGold said.
In India, AngloGold said demand was adversely affected by price volatility
and the lack of seasonal buying opportunities during the fourth quarter.
However, for 2007 as a whole, Indian gold jewelry consumption is
expected to show an increase due to record demand levels in tonnage and
value terms achieved in the first half of the year.
High absolute price levels will also act as a constraint on demand,
AngloGold said, as manufacturers will have access to reduced levels of
gold working inventory finance.