World Gold Council eyes India and China, sees strong gold fundamentals
LONDON, August 30, 2010 – The World Gold Council is concentrating on India, China and the Middle East, the world’s leading gold jewellery markets, to boost gold demand and says fundamentals for bullion consumption remain strong.
David Lamb, managing director, jewellery, the World Gold Council
“We have major programmes to support the core cultural imperatives in India and China. We are taking a particular look at the trade structure to see how brands and retail possibilities would develop in rural economies,” David Lamb, managing director, jewellery, of the World Gold Council, told Jewellery Outlook in an interview.
“We see a particular challenge and opportunity in recruiting younger people into the market so we have dedicated programmes in both of the leading markets.”
Lamb said dramatic increases in prices cause consumers to step out of the market in the short term and think where prices could settle, but there was no fundamental negative, certainly not in the markets of India and China.
“In China you can see that with the increase in wealth, particularly in expanding regional and rural economies, gold into people’s hands is a possibility for the first time ever. We see aspiration levels at the highest. We know we have a product that people want and the economic expansion makes it a possibility.”
“The fundamentals of demand are solid,” Lamb said, but noted that the U.S. market was having difficulties because it faced economic problems, didn’t have the addiction to high caratage, and didn’t have the cultural association with gold.
Lamb was attending a function at Joyalukkas’s jewellery store in London to celebrate its fourth anniversary. The outlet in Green Street in east London, serving a large British-Asian market, is located amongst a thriving community of retail jewellers.
“Indians remain the engine of the consumer markets. What gets more exciting than celebrating four successful years in the middle of some beautiful merchandise? You can see that the standard of design, the standard of manufacturing and the standard of cultural significance create obvious linkages and synergies around ideas.
“The task here is to constantly reinvent traditions because the gold market in India is driven by the cultural imperative. People constantly change their tastes, their dreams and their aspirations.
“And the design response, the flexibility to incorporate Western looks and tastes, is essential for the future of the gold industry,” Lamb said.
He was positive about gold demand, but said the industry wanted a slow rise in gold prices — and less volatility.
“One of the things that make gold interesting across the world at the moment is that the last recession has taught us a phrase that we didn’t know before – ‘the notion of toxic asset’. And here, surrounded by gold jewellery, you can see something that sits in absolute opposition to the notion of toxic assets.
“It’s a real tangible asset with lasting and enduring value. The ups and downs of the price in the short term obviously set challenges that we need to navigate but what you really see here is enduring value.”