Asian gold demand from this April to June will reach a quarterly record as bullion consumers in the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the World Gold Council said on Wednesday.
Gold prices fell to their lowest in more than two years at $1,321.35 an ounce in mid-April on signs of economic improvement in main markets and fears that central banks around the world could start to curtail their bullion-friendly policy measures.
The move scared investors in the West, triggering a sharp liquidation of speculative and ETF positions. But lower prices also prompted strong physical demand from price-sensitive countries such as India and China, which together account for more than 50 percent of consumer demand for bullion.
"Asian markets will see record quarterly totals of gold demand in the second quarter of 2013," WGC Managing Director Marcus Grubb said.
"Even if ETF outflows continue in the United States, it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold."
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There are also a large number of nations whose notes clearly specify that the possessor of the note will be redeemed in gold as per the value of the note.
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