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MANCHESTER, England, Feb. 22 /PRNewswire/ -- The World Gold Council is forecasting a surge in demand as the jewellery industry rushes to buy gold in 2010.
A rush of investors last year caused gold prices to peak and this in turn accounted for a slight dip in demand from the jewellery industry. However, as the dollar strengthens and the price of gold levels out, the World Gold Council predicts an increase in demand from this particular sector.
This demand may also increase in light of the slow financial recovery finally beginning in many countries following the economic downturn. This is expected to be a huge financial boost to the jewellery industry, which is the single biggest gold consuming industry. The rise in the price of gold during 2008 and 2009 was largely down to weakened global currencies and thus increased investment. However, it could not have come at a worse time for the jewellery industry, which relies heavily on consumer confidence, which in turn tend to follow suit with the state of the economy. Poor economic times across the world and the higher gold prices, meant that there was an 11% drop in demand for gold from the jewellery industry in 2009. There was also a drop of around 29% in jewellery sales.
However, recovery of the jewellery industry and increased demand certainly doesn't mean that investment is forecasted to fall. In fact, as some analysts predict a continued rise in the price of gold throughout the year and global currencies continue to be inconsistent, investment in the precious metal is almost certain to continue.
