Gold demand slides to three-year low in Q1: WGC

[harreymartin]

Gold investment nearly halved in the first quarter as a brighter view of the US economy prompted investors in the West to favour other assets like stocks over bullion, the World Gold Council said on Thursday.

Overall gold demand fell 13 percent to a three-year low of 963 tonnes in the last quarter as rising jewellery demand and strong appetite for coins and bars failed to offset a sharp drop in investment, chiefly in Exchange-Traded Funds.

These investment vehicles, which issue securities backed by physical metal, have proved a popular way to gain exposure to the gold price since the start of the financial crisis, but saw record outflows in the first quarter.

Record Chinese demand for jewellery, coins and bars, contributing to an extra 60 tonnes of jewellery demand and 35 tonnes of bar and coin offtake worldwide still fell well short of counter-balancing a 195-tonne drop in investment. The fall in financial flows into the metal included a 177-tonne outflow from ETFs.

The WGC's managing director for investment, Marcus Grubb, said he expected investment levels to stabilise over the year as a whole, and for rising interest in physical gold to lead to more stable demand in the full year.

Read more: http://harreymartin.blurpalicious.co...-low-in-q1-wgc

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[Alan Mendelson]

As I write this, Gold is trading at $1375 an ounce and I am expecting gold to challenge the $1320 level which was the low point in the recent sell-off. Gold might even violate this support line and then challenge or even take out the long term support at $1300 which I have been writing about in my weekly report on the gold market here: http://alanbestbuys.com/id82.html