August 18, 2011

Asian Axis of India and China Continues to Advance Gold Demand

LONDON, August 18, 2011 /PRNewswire/ --

Gold's strong start to the year was reinforced during the second quarter
of 2011 where total global gold demand measured 919.8 tonnes (t), worth a
near-record US$44.5bn, with broad-based support across all sectors and
geographies. Standout markets were India and China, as these two markets
accounted for 52% of total bar and coin investment and 55% of global
jewellery demand, the World Gold Council announced today.

According to the Gold Demand Trends report for Q2 2011, gold demand in
the second half of 2011 will remain strong owing to a number of key factors:

        - Despite a higher gold price, Indian and Chinese demand grew
          38% and 25% respectively during Q2 2011 compared to the same period of
          2010. This growth is likely to continue, due to increasing levels of
          economic prosperity, high levels of inflation and forthcoming key gold
          purchasing festivals.
        - The impact of the European sovereign debt crisis, the
          downgrading of US debt, inflationary pressures and the still-fragile
          outlook for economic growth in the West are all likely to drive high
          levels of investment demand for the foreseeable future.
        - Central banks are likely to remain net purchasers of gold.
          Purchases of 69.4t during Q2 2011 demonstrated that central banks are
          continuing to turn to gold to diversify their reserves.

Marcus Grubb, Managing Director, Investment at the World Gold Council

"The strength of demand in India and China, coupled with an overall drop
in recycling activity this quarter, demonstrates that consumers have
adjusted to the current price environment and expect the upward price trend
to continue. In addition, ongoing macro economic uncertainty, the continued
sovereign debt crisis and widespread inflationary pressures, will result in
gold demand remaining strong."

Gold Demand Statistics for Q2 2011:

        - Global gold demand in the second quarter of 2011 totalled
          919.8t, down 17% from the remarkably strong levels of 1,107t in the
          second quarter of 2010. Gold demand in value terms grew by 5%
          year-on-year reaching US$44.5bn up from US$42.6bn in the second quarter
          of 2010. This is the second highest quarterly value on record, only
          fractionally below the US$44.7bn record that occurred in the fourth
          quarter in 2010.
        - The quarterly average gold price rose by 26%, reaching a record
          high of US$1,506.13 (as per the London PM fix).
        - Second quarter 2011 global investment demand was 359.4t, 37%
          down year-on-year from 574.2t in the second quarter in 2010, which was
          the second highest quarter ever.
        - ETFs witnessed solid net inflows of almost 51.7t during the
          second quarter of 2011, which compared well to the previous 12 quarters
          (excluding two record peaks) where ETF inflows have averaged 41.4t.
        - Demand for gold bars and coins totalled 307.7t during the second
          quarter of 2011, a gain of 9% over year-earlier levels of 282.6t. In
          value terms, bar and coin demand was worth US$14.9bn, an increase of 37%
          from US$10.9bn in the second quarter of 2010.
        - Jewellery demand in the second quarter of 2011 was 442.5t, 6%
          higher than the year-earlier levels of 416.7t. In value terms, this
          represented a 34% increase to US$21.4bn from US$16.0bn in the same
          quarter last year. India, China and Turkey together accounted for 59% of
          global jewellery demand at 260.1t in the second quarter of 2011 and
          registered a combined growth of 36.1t on year- earlier levels.
        - Technology demand was up by 2% at 117.9t from 116.1t in the
          second quarter of 2010, generated by an increase in demand from the
          electronics segment. In value terms this was a quarterly record of
          US$5.7bn, up 28% from the next highest in Q4 2010 of US$4.5bn.
        - Gold supply was 1,058.7t in the second quarter of 2011, which
          was a 4% decline from 1,108.3t in the same period in 2010, as a result
          of an increase in net purchasing by central banks. Mine production rose
          by 7% to 708.8t from year-earlier levels of 659.4t in 2010.
        - Central banks' purchases this quarter more than quadrupled
          compared to the levels of the second quarter in 2010.
        - Recycling activity stood at 429.3t, 3% down year-on-year from
          444.3t in the second quarter of 2010.

A copy of the Q2 2011 Gold Demand Trends report, which includes
comprehensive data, can be viewed at:

Note to editors:

World Gold Council

About the World Gold Council

The World Gold Council is the market development organisation for the
gold industry. Working within the investment, jewellery and technology
sectors, as well as engaging in government affairs, our purpose is to
provide industry leadership, whilst stimulating and sustaining demand for

We develop gold-backed solutions, services and markets, based on true
market insight. As a result, we create structural shifts in demand for gold
across key market sectors.

We provide insights into the international gold markets, helping people
to better understand the wealth preservation qualities of gold and its role
in meeting the social and environmental needs of society.

Based in the UK, with operations in India, the Far East, Europe and the
US, the World Gold Council is an association whose members include the
world's leading and most forward thinking gold mining companies. For further
information visit

        For further information please contact:
        Stephanie Mackrell
        World Gold Council
        T +44-20-7826-4763
        E [email protected]

        Quintin Keanie
        Capital MSL
        T +44-20-7255-5154
        E [email protected]

SOURCE World Gold Council