HONG KONG: The World Gold Council said the first-quarter gold jewelry demand in Hong Kong showed the biggest jump among all regions in the world, as the city's economy remains relatively resilient amid the global economic recession.

The council said the world's gold jewelry demand in the first quarter plunged 24 percent year on year, as the high and volatile gold price curbed consumers' jewelry expenditures.

However, the gold jewelry demand in Hong Kong and China's mainland succeeded in bucking the trend by showing around 8 percent and 3 percent growth, respectively.

Albert Cheng, Far East managing director at the World Gold Council said on Friday that the total gold demand in China's mainland should continue to increase in the second quarter.

"The 4 trillion yuan economic stimulus package and strong economic growth may help secure consumers' income," Cheng said. "That will also give a boost to the gold jewelry sales."

Although the economic recession and high gold price have depressed the global jewelry demand for gold, the investment demand is still growing, Cheng said.

"As the supply of gold is quite limited, we expect the gold market to maintain a good prospect in the coming future," he added.

Total gold demand in China's mainland, the second biggest gold market, reached around 400 tons in 2008, while the demand in the world's largest gold market India amounted to more than 650 tons.

Marcus Grubb, managing director of investment research and marketing at the World Gold Council, said the total gold demand in China's mainland may surpass India's in 2009, because of the country's robust jewelry and investment demand.

(HK Edition 07/25/2009 page5)