Not surprisingly, gold demand for the second quarter of 2010 was up significantly compared to the year ago period, according to the recently released Gold Demand Trends report from the World Gold Council.
Total identifiable gold demand for the quarter was 1,050.3 tonnes. This represents an increase of 36% over the level for the year ago period and an increase of more than 38% over the level for the first quarter of 2010. Demand was led by increases in identifiable investment (+118%) and industrial demand (+14%), which more than offset a small decrease in jewelry demand (-5%).
Behind the increase in investment demand were the concerns about sovereign debt of European countries. This sparked strong demand in German speaking countries, with demand in Germany increasing by 59% year over year. The U.S. was another source of strong demand with an increase of 32% year over year.
The average gold price for the second quarter was $1,196.74 per ounce, or 30% above the average for the year ago period. During the quarter, gold also reached a fresh all time high in dollar terms when it reached $1,261.00 per ounce on June 28, 2010.
The World Gold Council continues to expect robust demand for gold throughout the remainder of 2010, citing growth in demand from India and China, and increasing global investment demand driven by uncertainty about public debt and the economic recovery.
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