When stock markets crash, investors normally rush to buy gold. With the Sensex plunging continuously in 2008, gold was much in demand. The yellow metal saw a 66 per cent jump at Rs 30,600 crore during the third quarter (July-September) of the year 2008. In tonnage terms, the demand went up by 31 per cent to 250 tonne in the third quarter of 2008 as against 190 tonne during the corresponding period lat year, a World Gold Council (WGC) statement said. The Sensex is down nearly 58 per cent this year.

According to WGC, demand for gold jewellery in the country reached 178 tonne, a rise of 29 per cent in tonnage compared with the same period in 2007, despite a deteriorating economic situation creating a greater squeeze on consumer spending. “It has been an outstanding quarter for demand in India, the world’s largest consumer of gold. I am encouraged by the fact that both investment demand in bars and coins and jewellery demand have surged against global credit crunch impacts our nation,” WGC managing director Ajay Mitra said. In currency terms, demand for jewellery saw a rise of 78 per cent, to Rs 21,900 crore from Rs 12,300 crore last year.

After a sluggish start to the quarter, gold jewellery demand surged driven by rural economic boom, urban consumers wanting to safeguard their investments. “Looking forward, we believe the uncertainties in the financial markets will continue, therefore, driving investors towards gold and its safe haven and insurance policy characteristics,” Mitra said.

... contd.