1Q gold-jewelry demand soars

Demand for gold jewelry in the first quarter of 2007 increased 17 percent in tonnage terms and 38 percent in dollar terms, compared with the same period in 2006, a new study finds.

The study, by precious-metal consultancy firm GFMS Ltd. for the World Gold Council, finds that global demand for gold has more than doubled in the past four years to $17.4 billion.Identifiable demand for gold in the first quarter appeared 4 percent higher in tonnage terms and 22 percent higher in dollar terms, compared with the same period in 2006, according to the report.Gold supply, however, remained tight during the first quarter.

Consumers became accustomed to current prices and restrained from selling their jewelry, and mining companies continued to dehedge, leading to a 2 percent drop in supply from the first quarter of 2006.The study projects a positive outlook for the second quarter of 2007, with gold-jewelry demand expected in the majority of key markets.