The top body said there was positive tonnage growth in the investment and industrial segments and double-digit dollar growth in the jewellery sector.

The 2006 figures, compiled independently for the WGC by GFMS, reveal that identifiable investment demand in 2006 was 7% higher than in 2005 in tonnage terms, (637t vs 596t) and 45% higher in dollar terms, spurred by a 27% year on year tonnage increase in holdings of gold Exchange Traded Funds and similar products. The fourth quarter was particularly strong with a 19% rise in tonnage terms and a 51% increase in dollar terms, the WGC said.

Jewellery demand clmibed 14% in dollar terms in 2006 as a whole, but fell back by 16% in tonnage terms due to a volatile gold price in the first half of the year.

In the industrial sector, demand jumped 7% in tonnage terms and 45% in dollar terms to set a new annual record.

Industrial demand was at its highest ever at 458 tons, while jewellery sales reached an all time record in US$ terms at $44bn. The first half of the year proved a difficult one for the gold jewellery market as high price volatility deterred consumers from buying. However, more stable prices towards the end of the year resulted in a very satisfactory level of demand.

Supply went down 13% in tonnage terms including a sharp reduction in net selling by central banks. The WGC said 2007 began with brisk demand in most jewellery markets in January, while investor interest has also remained positive. APA