Gold Demand Trends

Gold Demand Trends Q2 2014

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Categories: Supply and demand, Jewellery, Investment, Technology, Reserve asset management

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Managing Director, Investment Strategy

The World Gold Council's Gold Demand Trends (GDT) is the leading industry resource for data and opinion on world-wide gold demand. Our quarterly publication examines demand trends by sector and geography.

Executive summary:
This section of the report considers the main themes to have emerged in global gold demand during the second quarter of 2014.

  • Jewellery: Second quarter demand, which held within the broad upward trend from 2009, accounted for over 50% of global gold demand in the second quarter. Year-on-year comparisons were affected by the surge in demand seen in Q2 of the previous year, but demand was largely in line with its five-year average.
  • Investment: The gold price followed a narrow sideways range in the second quarter, making a subdued environment for gold investors. Consequently, bar and coin demand saw a significant reduction from the record high in Q2 2013 and outflows from ETFs slowed sharply.
  • Technology: Demand for gold in technological applications fell modestly to 101t. Improvements in both the economic environment and consumer sentiment helped stem losses from substitution. However, fabricators in all segments continue to look for cheaper alternatives to gold in order to manage costs.
  • Central Banks: This sector remains a solid element of demand with net purchases of 118t in the second quarter, representing a 28% increase year-on-year. The announcement of a fourth CBGA in the second quarter also reiterated that sales will not be forthcoming from some of the largest holders.
  • Supply: Gold supply increased 10%, owing to a 13% increase in mine supply in the second quarter; recycled gold was little changed. Q2 also saw 50t of net producer hedging; however these fresh positions have had minimal effect on the overall outstanding hedge book.

Gold demand of 964t in the second quarter was, unsurprisingly, lower when compared with the exceptional upsurge in demand in Q2 2013. Jewellery demand weakened year-on-year, but the broad, 5-year uptrend remains intact. Investment demand pulled back from the extremes seen during last year as relatively stable price conditions contributed to the subdued environment. Central banks continued to buy gold at a solid, steady pace. Mine production grew 4% year-on-year for a second consecutive quarter, contributing to a 10% increase in gold supply.

Key demand data

GDT Q2 2014 infographic

Gold Demand Trends Q2 2014 - GDT Q2 2014 infographic
Gold Demand Trends Q2 2014 - GDT Q2 2014 infographic
Gold Demand Trends Q2 2014 - GDT Q2 2014 infographic

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Demand statistics (in tonnes and value)

      2012 2013 2014 Q2'14 vs Q2'13
Tonnes 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 % chg
Jewellery 1,999.3 2,360.9 508.8 508.6 543.1 726.7 564.8 526.3 582.1 509.6 -30
Technology 415.4 409.1 104.4 98.2 103.7 103.8 103.4 98.2 98.8 101.0 -3
Electronics 284.5 279.5 72.3 67.0 71.0 70.1 71.1 67.3 67.5 68.8 -2
Other Industrial 92.4 93.2 22.7 21.9 23.7 24.2 23.3 22.0 22.7 23.3 -4
Dentistry 38.6 36.3 9.4 9.3 9.0 9.5 9.0 8.9 8.6 8.9 -7
Investment 1,626.3 886.2 446.9 469.8 286.1 225.7 189.5 184.9 283.3 235.4 4
Total bar and coin demand 1,347.3 1,766.2 309.2 381.7 462.6 627.9 309.8 365.8 285.9 275.3 -56
Physical Bar demand 1,039.1 1,379.1 234.8 297.5 355.6 496.6 251.2 275.7 224.6 212.1 -57
Official Coin 194.7 283.3 44.6 49.8 76.2 93.0 42.6 71.4 47.3 46.3 -50
Medals/Imitation Coin 113.4 103.8 29.7 34.3 30.8 38.4 16.0 18.8 14.0 17.0 -56
ETFs & similar products1 279.1 -880.0 137.8 88.1 -176.5 -402.2 -120.2 -181.0 -2.6 -39.9 -
Central bank net purchases 544.1 409.3 112.3 150.4 130.8 92.1 101.5 85.0 124.3 117.8 28
Gold demand 4,585.2 4,065.5 1,172.5 1,227.0 1,063.7 1,148.3 959.2 894.4 1,088.4 963.8 -16
London PM fix, US$/oz 1,669.0 1,411.2 1,652.0 1,721.8 1,631.8 1,414.8 1,326.3 1,276.2 1,293.1 1,288.4 -9
      2012 2013 2014 Q2'14 vs Q2'13
US$mn 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 % chg
Jewellery 107,283 107,120 27,026 28,156 28,494 33,057 24,084 21,592 24,199 21,108 -36
Technology 22,292 18,560 5,545 5,436 5,438 4,722 4,407 4,031 4,107 4,183 -11
Electronics 15,265 12,682 3,842 3,709 3,725 3,188 3,033 2,761 2,807 2,850 -11
Other Industrial 4,957 4,229 1,205 1,212 1,243 1,103 992 903 943 966 -12
Dentistry 2,069 1,649 498 515 470 431 382 367 357 367 -15
Investment 87,268 40,207 23,738 26,008 15,008 10,266 8,082 7,585 11,778 9,752 -5
Total bar and coin demand 72,293 80,134 16,422 21,129 24,270 28,563 13,209 15,010 11,884 11,405 -60
Physical Bar demand 55,757 62,571 12,472 16,471 18,655 22,590 10,711 11,310 9,335 8,787 -61
Official Coin 10,450 12,852 2,370 2,757 4,000 4,228 1,818 2,930 1,967 1,916 -55
Medals/Imitation Coin 6,086 4,712 1,579 1,901 1,614 1,745 681 770 582 703 -60
ETFs & similar products1 14,975 -39,927 7,317 4,879 -9,261 -18,297 -5,128 -7,425 -107 -1,654 -
Central bank net purchases 29,193 18,572 5,967 8,323 6,863 4,187 4,326 3,488 5,166 4,879 28
Gold demand 246,035 184,459 62,276 67,922 55,803 52,232 40,899 36,696 45,250 39,922 -24

 

1Exchange Traded Funds and similar products including: Gold Bullion Securities (London), Gold Bullion Securities (Australia), SPDR® Gold Shares (formerly streetTRACKS Gold Shares), NewGold Gold Debentures, iShares Gold Trust, ZKB Gold ETF, GOLDIST, ETF Securities Physical Gold, ETF Securities (Tokyo), ETF Securities (NYSE), XETRA-GOLD, Julius Baer Physical Gold, Central Fund of Canada and Central Gold Trust, Swiss Gold, iShares Gold Bullion Fund (formerly Claymore Gold Bullion ETF), Sprott Physical Gold Trust, ETF Securities Glitter, Mitsubishi Physical Gold ETF and iShares Gold CH.

All data may be subject to revision in the light of new information.

Source: GFMS, Thomson Reuters; The London Gold Market Fixing Ltd; World Gold Council

© Copyright 2014 World Gold Council and GFMS, Thomson Reuters [and others]. All rights reserved.  No reproduction permitted without permission.  See here for details.

Data on the supply and demand for gold is compiled by GFMS, Thomson Reuters. The company provides a number of tables exclusively for the World Gold Council. Please refer to the notes and copyright information for details regarding the restrictions on disseminating these data. GFMS, Thomson Reuters should be contacted for further information or for historical data. In addition, certain data is available on Thomson Reuters and Bloomberg.

Compare consumer demand by region, category and time period in the Regional analysis section.

Gold Demand Trends Q2 2014 video

Marcus Grubb, Managing Director Investment Strategy, talks through the findings from the Q2 2014 Gold Demand Trends report.