Gold Demand Trends Q1 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 first quarter of 2014.

  • Jewellery: First quarter demand was 571t, 3% higher than the corresponding period last year. A lower price environment compared to Q1 2013 was supportive in many markets, while New Year celebrations in key Asian markets ensured that jewellery demand followed seasonal patterns.
  • Investment: Investors adopted a ‘wait-and-see’ approach in the first three months of 2014, with marked divergences between ETFs and bar and coin demand. Net ETF outflows were zero as geopolitical tensions offset positive economic expectations. Bar and coin demand fell to 283t as investors waited for a clear direction in price.
  • Technology: All segments of technology slipped by 4% year-on-year, with cost pressures fuelling the substitution away from gold to cheaper alternatives. Demand totalled 99t, down from 104t in Q1 2013.
  • Central Banks: Official reserves of gold increased by 122t in Q1 2014, as net purchases once again topped the 100t level. This marked 13 consecutive quarters of net purchases, demonstrating the continued desire among central banks to diversify their assets.
  • Supply: Mine production increased by 6% to 721t in Q1, while recycled gold fell 13% to 322t due partly to improving economic conditions. Overall, this led to a marginal increase in total supply, to 1,048t.

After an exceptional 2013, gold demand made a robust start to 2014 - virtually unchanged year-on-year at 1,074.5 tonnes. Jewellery demand gained moderately, largely due to the environment of lower gold prices compared with Q1 2013 and seasonal factors in many markets. Divergence was seen within the investment space: net ETFs flows were zero, compared with 177t of outflows in Q1 2013, while bar and coin investment unsurprisingly fell far below the record Q1 levels of demand seen a year ago. Central banks continued to purchase gold for its diversification and risk management properties.

Key demand data

GDT Q1 2014 infographic

Gold Demand Trends Q1 2014 - GDT Q1 2014 infographic
Gold Demand Trends Q1 2014 - GDT Q1 2014 infographic
Gold Demand Trends Q1 2014 - GDT Q1 2014 infographic

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Demand statistics (in tonnes and value)

      2012 2013 2014 Q1'14 vs Q1'13 4-quarter2
Tonnes 2012 2013 Q2 Q3 Q4 Q1 Q2 Q2 Q41 Q11 % chg % chg
Jewellery 1,998.0 2,361.2 458.9 478.9 545.3 554.7 693.6 539.6 573.4 570.7 3 17
Technology 415.4 408.6 104.9 104.4 98.2 103.5 103.7 103.0 98.3 99.0 -4 -2
Electronics 284.5 278.9 71.4 72.3 67.0 70.9 69.9 70.9 67.2 67.7 -4 -2
Other Industrial 92.3 93.4 23.7 22.7 21.9 23.7 24.3 23.2 22.2 22.7 -4 0
Dentistry 38.6 36.3 9.9 9.4 9.3 8.9 9.5 9.0 8.9 8.6 -4 -4
Investment 1,637.3 900.8 305.0 449.7 472.6 288.1 228.0 192.0 192.7 282.3 -2 -41
Total bar and coin demand 1,358.2 1,780.6 305.0 311.9 384.4 464.7 630.3 312.2 373.5 282.5 -39 9
Physical Bar demand 1,036.8 1,381.1 228.4 234.3 297.0 356.0 496.9 251.6 276.6 216.4 -39 11
Official Coin 208 295.7 53.8 47.9 53.1 77.9 95.1 44.6 78.1 52.1 -33 16
Medals/Imitation Coin 113.4 103.8 22.8 29.7 34.3 30.8 38.4 16.0 18.8 14.0 -54 -26
ETFs & similar products3 279.1 -879.8 0 137.8 88.1 -176.5 -402.2 -120.2 -180.8 -0.2 -- --
Central bank net purchases 544.1 409.3 163.5 112.3 150.4 130.8 92.1 101.5 85.0 122.4 -6 -28
Gold demand 4,594.7 4,080.0 1,032.4 1,145.3 1,266.4 1,077.2 1,117.4 936.0 949.4 1,074.5 0.0 -10
London PM fix, US$/oz 1,669.0 1,411.2 1,609.5 1,652.0 1,721.8 1,631.8 1,414.8 1,326.3 1,276.2 1,293.1 -21 -20
      2012 2013 2014 Q1'14 vs Q1'13 4-quarter2
US$mn 2012 2013 Q2 Q3 Q4 Q1 Q2 Q3 Q41 Q11 % chg % chg
Jewellery 107,213 107,134 23,747 25,436 30,187 29,100 31,548 23,008 23,526 23,727 -18 -6
Technology 22,288 18,539 5,431 5,545 5,437 5,432 4,719 4,394 4,032 4,117 -24 -21
Electronics 15,265 12,655 3,692 3,842 3,709 3,718 3,181 3,024 2,757 2,816 -24 -21
Other Industrial 4,954 4,238 1,227 1,205 1,213 1,245 1,107 988 909 945 -24 -19
Dentistry 2,069 1,646 512 498 515 469 430 382 366 357 -24 -23
Investment 87,855 40,873 15,782 23,883 26,159 15,116 10,373 8,186 7,907 11,736 -22 -53
Total bar and coin demand 72,880 80,792 15,783 16,567 21,280 24,377 28,670 13,313 15,324 11,746 -52 11
Physical Bar demand 55,636 62,663 11,820 12,442 16,439 18,678 22,600 10,729 11,348 8,997 -52 10
Official Coin 11,158 13,417 2,782 2,546 2,940 4,085 4,325 1,903 3,206 2,167 -47 6
Medals/Imitation Coin 6,086 4,712 1,180 1,579 1,901 1,614 1,745 681 770 582 -64 -40
ETFs & similar products3 14,975 -39,919 -1 7,317 4,879 -9,261 -18,297 -5,128 -7,417 -10 -- --
Central bank net purchases 29,193 18,572 8,462 5,967 8,323 6,863 4,187 4,326 3,488 5,089 -26 -42
Gold demand 246,549 185,118 53,421 60,832 70,106 56,511 50,827 39,913 38,953 44,669 -21 -28

 

1Provisional.
2Percentage change, 12 months ended March 2014 vs 12 months ended March 2013.
3Exchange 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.

Source: The London Gold Market Fixing Ltd, GFMS, Thomson Reuters, 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 Q1 2014 video

Marcus Grubb, Managing Director Investment Strategy, talks through the findings from the Q1 2014 Gold Demand Trends report.