On the other hand, Pakistan's growth in demand for the yellow metal, at record 32.3 tonnes in third quarter, is said to have jumped 102 per cent from the depressed level of a year ago.

The outlook for demand in the fourth quarter is uncertain, with the impact of October's army coup, said World Gold Council in its latest Global Demand Trends.

Total gold demand in the USA was 118.4 tonnes in 1999's third quarter, virtually unchanged from Q31998. Year-to-date demand was 330.0 tonnes, 13 per cent higher than the same period last year.

According to WGC, the main reason for the lack of growth in the USA's Q399 demand was a sharp fall in investment demand, with gold coin sales 19.4 tonnes, 17 per cent lower than a year earlier. Stockpilingof coins on fears of y2K financial instability came off high levels of the first half of the year although there were still supply shortages from the US Mint.

Y2K fears, coupled with concerns over a stock market correction, meant coin demand remained historically high, with Q3 demand still more than the entire demand in 1996.

According to WGC, total demand in the 27 markets covered by it was 876.5 tonnes, an increase of 22 per cent over 1998's third quarter. This is a record for the third quarter. Demand reached a new all-time high for any three-month period, eight per cent above the previous peak set in 1999's second quarter, said the WGC report.

For the first nine months of 1999, gold demand totalled 2,471.6 tonnes an increase of 30 per cent year -on-year and also a record for the period, WGC said.

South east Asia and South Korea followed Pakistan's growth in demand for gold (in 1999's third quarter) by recording 70 per cent jump while Japan recorded 64 per cent jump. India, the largest consumer ofyellow metal, recorded 38 per cent growth. There were encouraging increases in North Asia (up 30 per cent), while in the middle east countries it was just 18 per cent.

The outlook for gold demand in South Korea remains promising with the economy continuing to improve and indications that jewellry demand was growing at the end of Q3 as the wedding season and the Chuesok holiday approached.

North Asia (China, Hong Kong and Taiwan):
In China, the combination of the wedding season, the 50th anniversary of the People's Republic and expectations of higher gold prices drove Q3 demand to 48 tonnes, up 11 per cent from the same period last year. Demand for the year to date in China reached 149 tonnes, a gain of three per cent over 1998.Surging demand in Taiwan drove aggregate Q3 gold consumption in North Asia to 87.6 tonnes, 30 per cent above year ago levels.

Economic recovery lifted demand for gold in Hong Kong, which enjoyed strong gold demand growth, with offtake rising 15 per cent year on year to7.6 tonnes in Q3.

Marginal demand growth in Europe:
Slow but steady economic recovery brought stronger jewellry demand in Europe in Q3, up two per cent to 74.3 tonnes. Continuing strong consumer spending in France ensured gold offtake rose four per cent higher to 13.6 tonnes in Q3. Gold offtake in Germany fell to 12 per cent, 15 per cent lower than a year earlier. A year-on-year fall of 66 per cent in investment demand was behind the decline, with only 1.6 tonnes of gold purchased, ths contrasted badly with Q3 98 when coin sales to investors nervous ahead of the launch of the euro were booming.

In the UK, gold jewellry demand rose seven per cent year on year in Q3 with offtake at 18.8 tonnes. This compares favourably with the first half of the year, when demand fell 15 per cent, for the same period of 1998.