Rising GDP lifts global Gold demand from consumers: World Gold Council

UNITED STATES September 30 2014 5:20 PM

 

NEW YORK (Scrap Register): Rising gross domestic product (GDP) lifted global demand for gold from consumers, said the World Gold Council. 

 

Many have written that investors look for a store of wealth and thus turn to gold during times of recession, the WGC added. 

 

“Much less has been written about the effect that positive economic growth has on consumer demand, despite the fact that this makes up the lion’s share of physical gold demand,” said the WGC. 

 

A certain amount of investment demand for gold abates during expansionary times. However, some investors still might add to gold holdings as part of their long-term savings as a result of positive economic growth. Overall, investment demand is far smaller than jewelry demand, said a report from the WGC.

 

“Rising incomes boost jewelry demand. In the last five years, jewelry demand averaged 58%, compared to 35% for investment demand. The new analysis shows that a 1% increase in GDP (gross domestic product) lifted jewelry consumption by an average of 5% – all else equal,” said WGC.