Greek Tragedy is Good for Gold

Global gold demand fell 25 percent in the first quarter of 2010, but is expected to rebound later this year.

According to Marcus Grubb, a senior World Gold Council official, robust investment in the West and strong jewellery sales in Asia will lead to higher demand than a year ago.

The Greek debt crisis has spurred Western investment demand in gold in the second quarter above the levels seen a year ago, Grubb said.

Jewellery demand in China is also set to rise in the second quarter, he added. However, the picture in India is mixed with the Akshaya Tritiya festival expected to boost jewellery sales but a weakened rupee making gold more expensive for locals. Nevertheless, full-year gold demand in India is expected to be stronger than in 2009.

Grubb declined to make gold price forecasts but said he agreed with the market view that gold would have strong support at $1,050-1,045 per ounce.

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