Last Updated :
08 April 2009 at 18:00 IST
Old gold to be king in 2009 too!
Commodity Online JOHANNESBURG: If you thought how did the world coped with the increased demand for
Gold during the peak times in 2008, the answer lies in scrap.
Yes, the world witnessed a huge jump in scarp gold sales in 2008 and the trend is expected to continue due to the rising prices of the yellow metal and distress selling by individuals.
World renowned research firm GFMS estimates that in 2009, the first quarter scrap supply has exceeded the already high levels witnessed at the end of last year.
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The pressure on refining capacity this year has been quite tremendous. Several key consuming countries have, at times, emerged as net exporters of gold to the international market. Turkey, the fourth largest jewellery consumer last year, is a prime example of this trend, but by no means unique.
Talking about t2008, the research firm said global scrap supply rose by 27% in 2008 to over 1,200 tonnes.
Every region reported higher levels of
Gold recycling last year, largely because of profit taking and distress selling by
individuals, although the retail trade and manufacturers also melted larger quantities of unsold jewellery.
The most significant increase was reported by Turkey, due to a combination of soaring local prices and the economic downturn, which saw the country achieve a record level of recycling in 2008. High local prices were also a key driver in other countries, such as India, which saw its recycling rise by nearly a quarter last year.
Elsewhere, western markets saw their scrap supplies exceed the already elevated levels of 2007. In the United States and Europe, a combination of the rapid economic downturn, together with a far greater ease of selling old jewellery, partly because of greater advertising by scrap collectors, produced record levels of recycling in each market.
The jewellery supply chain also liquidated larger quantities of unsold product, itself a function of the high gold price and recessionary conditions, which limited the re-sale potential for this jewellery.
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