Buyers seek alternative to gold

31 January 2008
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31 January 2008 | Jake Kanter

Metals buyers are under pressure to look for alternatives to gold after the price of the metal reached another high.

According to the industry body the World Gold Council (WGC), industrial buyers account for 12 per cent of the market, purchasing on average 450 tonnes of the metal every year. Around 70 per cent of this is taken up by the electronics industry alone.

Richard Holliday, head of industrial applications at the WGC, told SM: "It's difficult for companies to reduce their use of gold.

"It's one of the most sustainable metals on the market and due to the electronics boom last year, demand for gold reached its highest level to date.

"But if the price of gold continues to rise, it puts pressure on the electronics industry to find alternative materials."

Gold rose to $914 (£460) an ounce this month as investors in the US looked for a safe haven from potential economic recession.

As SM went to press the price had fallen slightly to $896 (£457) an ounce.

The WGC predicts the industry will be prepared for the increase, but if prices remain consistently high, manufacturers will have to consider alternatives.

SMjan2008

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