Demand for gold grew 9% year-on-year in 2010, driven by the jewellery buying of Indian and Chinese customers, but also lifted by the fact that the world’s central banks became buyers for the first time in over two decades.
Demand last year hit 3,812 tonnes, above the 2008 peak, despite the fact that gold prices have increased 40% between 2008 and 2010. In value terms the demand for gold was $150 billion, up 38% year-on-year.
Demand for gold jewellery has shown remarkable inelasticity in the face of increasing prices. Between 2009 and 2010 gold prices gained 26%. However, demand still grew by 17%.
In India, the demand for gold jewellery was up...