Daily Gold Update

Source: Bloomberg

London— Gold demand added 2.6 percent in the fourth quarter from the previous three months as investment and jewelry consumption climbed amid record prices, the World Gold Council said. Global consumption increased to 819.7 metric tons as prices averaged 15 percent more than the third quarter, the London- based industry group said in a report today. Demand was 24 percent lower than a year earlier, when investors bought gold as a refuge from the global economic crisis. Gold jumped to a record $1,226.56 an ounce in December, rallying for a ninth year, as governments cut interest rates and committed trillions of dollars to prop up economies, while central banks in nations including India and China bought bullion. Physical demand increased as holdings in exchange- traded funds climbed.

�There was a perception out there that investor flows were going to tail off,� Rozanna Wozniak, the council�s investment research manager, said in an interview. �They�ve remained extremely resilient. On the jewelry side, consumers are getting more accustomed to the gold price at these levels.� Gold for immediate delivery in London averaged $1,100 an ounce in the fourth quarter, compared with $960 in the previous three months. The metal, up 2.1 percent this year, traded at $1,119.90 an ounce at 4:41 p.m. in London yesterday. The U.S. Dollar Index, a six-currency gauge of the greenback�s value, is up 2.5 percent this year after dropping 4.2 percent in 2009. Bullion tends to move inversely to the U.S. currency. See full story.