Gold Demand Trends

Gold Demand Trends Q3 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 and supply during the third quarter of 2014.

  • Jewellery: The third quarter saw 534.2t of gold jewellery consumed around the globe. The 4% year-on-year decline may suggest a weak market, but such comparisons are still heavily influenced by the events of last year. Longer term analysis shows a market in good health. Year-to-date volumes continue to extend the broad uptrend from the low seen in 2009.
  • Investment: Quarterly volatility in the US$ gold price was among the lowest levels seen over the past two decades, both a cause and effect of the benign demand environment. The lack of a clear price signal, as well as continuing to digest last year’s demand surge, caused investors to hold back from buying gold.
  • Technology: Demand for gold in all segments saw an identical 5% drop in the third quarter, with overall technology demand totalling 98t. Substitution to cheaper materials by fabricators and consumers continued to outweigh the positive influence of improved economic sentiment.
  • Central Banks: Ongoing economic and geopolitical instability encouraged central banks to continue to seek the protection and diversification of gold. Net purchases of 92.8 tonnes in Q3 brought year-to-date net purchases to 335 tonnes, slightly higher than the same period of 2013 (324t).
  • Supply: The broad themes surrounding gold supply during the first half of the year continued to play out in Q3. Recycling was well below last year’s levels, while mine production edged higher to exceed 800t for only the third time ever. Producers continue to show little appetite for hedging.

Gold demand totalled 929t in the third quarter, which proved to be a generally subdued quarter for the gold market. Jewellery demand softened by 4% year-on-year, but the comparison continues to be heavily influenced by the events in 2013. Longer term analysis shows a jewellery market in good health. Investment demand posted a 6% increase, reaching 204t, although a stable price caused investors to hold back. Central Banks added a further 92.8t to their coffers. Supply was down 7% in Q3; the volume of recycled gold continuing to shrink. 

Key demand data

GDT Q3 2014 infographic

gold demand trends q3 2014,
gold demand trends q3 2014,
gold demand trends q3 2014,

Demand statistics (in tonnes and value)

      2012 2013 2014 Q3'14 vs Q3'13
Tonnes 2012 2013 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 % chg
Jewellery 2,007.3 2,369.6 553.9 550.5 690.1 556.3 572.7 574.4 512.9 534.2 -4
Technology 415.3 408.2 98.0 103.5 103.5 103.1 98.1 98.1 100.5 97.9 -5
Electronics 284.4 278.8 66.9 70.9 69.9 70.9 67.1 67.4 69.5 67.4 -5
Other Industrial 92.3 93.1 21.8 23.7 24.2 23.2 22.0 22.2 22.1 22.0 -5
Dentistry 38.6 36.3 9.3 8.9 9.5 9.0 8.9 8.6 8.8 8.5 -5
Investment 1,622.5 893.3 469.0 286.3 230.6 192.0 184.3 280.0 226.1 204.4 6
Total bar and coin demand 1,343.4 1,773.3 380.8 462.9 632.8 312.3 365.3 282.6 266.0 245.6 -21
Physical Bar demand 1,039.2 1,388.5 297.5 356.5 502.2 254.2 275.6 222.7 204.8 185.7 -27
Official Coin 190.9 281.0 48.9 75.6 92.3 42.2 70.9 45.9 44.2 35.4 -16
Medals/Imitation Coin 113.4 103.8 34.3 30.8 38.4 16.0 18.8 14.0 17.0 24.5 53
ETFs & similar products1 279.1 -880.0 88.1 -176.5 -402.2 -120.2 -181.0 -2.6 -39.9 -41.3 -
Central bank net purchases 544.1 409.3 150.4 130.8 92.1 101.5 85.0 124.3 117.8 92.8 -9
Gold demand 4,589.2 4,080.5 1,271.2 1,071.1 1,116.3 952.8 940.2 1,076.9 957.3 929.3 -2
London pm fix, $/oz 1,669.0 1,411.2 1,721.8 1,631.8 1,414.8 1,326.3 1,276.2 1,293.1 1,288.4 1,281.9 -3
      2012 2013 2014 Q3'14 vs Q3'13
US$mn 2012 2013 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 % chg
Jewellery 107,712 107,515 30,660 28,880 31,392 23,719 23,500 23,881 21,247 22,018 -7
Technology 22,282 18,521 5,426 5,430 4,710 4,396 4,024 4,080 4,162 4,034 -8
Electronics 15,261 12,650 3,704 3,718 3,179 3,024 2,755 2,801 2,880 2,778 -8
Other Industrial 4,952 4,225 1,206 1,243 1,100 990 903 923 917 906 -9
Dentistry 2,069 1,646 515 469 430 382 366 357 365 350 -8
Investment 87,063 40,532 25,960 15,023 10,489 8,188 7,564 11,641 9,364 8,423 3
Total bar and coin demand 72,088 80,459 21,081 24,284 28,786 13,316 14,989 11,748 11,018 10,123 -24
Physical Bar demand 55,760 62,999 16,471 18,705 22,843 10,837 11,308 9,256 8,485 7,655 -29
Official Coin 10,242 12,748 2,709 3,965 4,198 1,798 2,911 1,910 1,830 1,459 -19
Medals/Imitation Coin 6,086 4,712 1,901 1,614 1,745 681 770 582 703 1,010 48
ETFs & similar products1 14,975 -39,927 4,879 -9,261 -18,297 -5,128 -7,425 -107 -1,654 -1,700 -
Central bank net purchases 29,193 18,572 8,323 6,863 4,187 4,326 3,488 5,166 4,879 3,825 -12
Gold demand 246,250 185,140 70,369 56,195 50,778 40,630 38,575 44,768 39,653 38,300 -6

 

1Exchange Traded Funds and similar products including: Gold Bullion Securities (London), Gold Bullion Securities (Australia), GLD® (formerly streetTRACKS Gold Shares), NewGold Gold Debentures, iShares Comex 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, CS ETF II (formerly Credit Suisse Xmtch) and Dubai Gold Securities.

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 Bloomberg.

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

 

Gold Demand Trends Q3 2014 video

Marcus Grubb, Managing Director Investment Strategy, talks through the findings from the Q3 2014 Gold Demand Trends report.