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2004 was the first year that the value of jewellery demand noticeably exceeded the level attained in 1998 .

Mumbai , Feb. 26

DEMAND for gold jewellery and retail investment in the country has remained strong, rising 49 per cent and 32 per cent (in tonnage terms) respectively during October-December 2004 over the same period a year ago, according to figures published by the World Gold Council and complied by GFMS Ltd.

The total consumer demand was up by 46 per cent to 178 tonnes (121 tonnes), said the report.

Gold jewellery demand was up 49.2 per cent at 147 tonnes (99 tonnes). Net retail investment surged by 31.4 per cent to 31 tonnes (23 tonnes).

During 2004,total consumer demand in the country rose by 17 per cent (jewellery 18 per cent and net retail investment 16 per cent). The increases were more spectacular in rupee terms (jewellery up 29 per cent and net retail investment up 27 per cent).

This (2004) was the first year that the value of jewellery demand noticeably exceeded the level attained in 1998, when demand was boosted by the initial impact of import liberalisation; it was 29 per cent higher than the 1998 level in rupee terms.

"Total supply to the market, while five per cent lower than a year earlier, was less constrained than in the July-September quarter.

As expected, net central bank selling rose following the start of sales under the second Central Bank Gold Agreement," the report said.

In 2004, mine output, at 2,478 tonnes, was sharply down and this was the sharpest fall in production since the 1940s.

GFMS expects an increase in production this year, partly as Grasberg (having mines in Indonesia) should see a return to full operations for the whole year and partly as 2004 start-up mines will contribute a full year's production, a WGC release said.

Globally, early indications suggest a continuation of strong demand for jewellery in January-March 2005.

This is so as strong buying is reported in India and Turkey and for the Chinese New Year.

The global figures, for the year 2004, reveal that consumer (jewellery and net retail investment) demand for gold recorded another strong quarter in October-December 2004, rising six per cent above 2003 levels in tonnage terms and a substantial 18 per cent in dollar terms.

For 2004 as a whole, the demand was seven per cent higher than 2003 in tonnage terms and 20 per cent in dollar terms. Jewellery demand performed well in both October-December 2004, up seven per cent in tonnage terms and 19 per cent in dollar terms.

For the full year, it was up 6 per cent (jewellery) and 19 per cent (net retail investment).

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