It may not be all glitters for diamond and gems-studded jewellery vendors, but the last leg of 2008 has brought the full market gleam out of bullions, bars and pure gold jewellery. Domestic demand for investment gold has been growing by as much as 15% in the last two months, according to the statistics compliled by World Gold Council.

“With other investment avenues like stocks, MFs and banks failing, some by even 70% in an year, investment in gold has climbed a demand graph by 14-15% in October and November,” World Gold Council Vice President Shivaram told FE. Total tonnage demand is said to be 18% higher than that of the previous year.

Coincidentially, this is roughly proportionate to the 15% appreciation that investment gold currently offers Y-2-Y.

The lion’s share of the demand came from investment in gold, Shivaram said. This was upto $10.7 billion, double the previous year’s levels.

Meanwhile, specialisation in diamond and gems-studded jewellery and pure gold jewellery has created a clear-cut market-differentiation between North and South Indian gold markets. “For example, it is the gem and diamond export units in North, which are integrated to the US and European markets, which are most hit by the economic meltdown. South India, which accounts for 45% of country’s total gold turnover, is relatively riding the `buy investment-gold’ wave,” says Princeson Jose, Chennai-based Jeweller said.

World wide demand of investment in gold is on the rise. It was on the third quarter of 2008 that dollar demand for gold reached an unprecedented quarterly record of $23 billion. The previous record in the second quarter of 2008 was 45% higher.Tonnage demand was also 18% higher than a year earlier, according to World Gold Council Statistics.

Although gold prices have toughweathered Mumbai terror attacks, the business shutdown in the three-four days had bled the gold merchants Rs 350 crore per day.

Jewellers are also wary of single metal products to diversify their products to platinum designs. Jose said that his own Rs 250-crore business has now spun off with Rs 6-crore platinum sales this year.