Gold Supply and Demand – Q2 2008

At US$21.2bn, global dollar demand for gold reached new heights in the second quarter of 2008, rising 9% on year earlier levels. Global investment demand for gold showed the strongest surge, reaching $3.5 billion in Q2 2008, 29% higher than Q2 2007, with particular strength in the US, China, Egypt and Vietnam.

However, with a decrease of 19% on Q2’07 to 735.6 tonnes, the continued high and volatile price of gold dampened total demand in tonnage terms during the quarter, according to Gold Demand Trends, which was released on August 13 by the World Gold Council (WGC).  This particularly impinged on jewellery demand, which fell 24% to 504 tonnes and was also affected by tightened consumer spending due to the global credit squeeze and growing inflationary pressures.  Markets which saw the largest decline in jewellery demand were India, which fell 47% to 118 tonnes, and the US, which fell 30% to 33 tonnes.  However, positive news came from China and Egypt, which saw a 2% and 8% increase in jewellery demand respectively.

Despite a number of markets turning to gold due to its investment attributes as a safe haven in times of rising inflation and unstable equity markets, identifiable global investment demand in tonnage terms was down by 4% over Q2 2007 to 119.8, as some investors took profits.  This decline represents a 9% decrease in net retail investment, which was partly offset by a move to positive net investment in Exchange Traded Funds (ETFs) and similar products.

Read about Gold Demand Trends in our detailed report, which also includes commentary on supply.

Press release: Gold demand hits record value levels in Q2’08 but volume suffers due to high and volatile gold prices

Data on the supply and demand for gold are compiled by GFMS Ltd. The company provides a number of tables exclusively for the World Gold Council. The following table shows a summary of gold demand. Links to more detailed tables, and to notes and copyright information, are given below. Please note the restrictions on disseminating these data.

Supply and demand statistics files

End-use consumption (tonnes) This provides details of jewellery consumption, industrial and dental fabrication, and all categories of investment which are statistically identifiable.

End-use consumption ($m) Similar information in US dollars.

Supply and demand (tonnes) In addition to a summary of demand information this also shows the categories of supply: mine output, net hedging or de-hedging by mining companies, scrap and net central bank sales.

Notes and copyright information

 

Identifiable gold demand ¹

Notes: Source: GFMS Ltd. 1. Identifiable end-use consumption excluding central banks. 2. Provisional . 3. “Other retail” excludes bar and primary coin offtake; it represents mainly activity in North America and Western Europe.  4. Exchange Traded Funds and similar products including:  LyxOR Gold Bullion Securities, Gold Bullion Securities (Australia),  SPDR® Gold Shares (formerly streetTRACKS Gold Shares), NewGold Gold Debentures, iShares Comex Gold Trust, ZKB Gold ETF, GOLDIST, ETF Securities, XETRA-GOLD, Central Fund of Canada and Central Gold Trust.

© Copyright 2008 World Gold Council and GFMS Ltd. All rights reserved.

Data on the supply and demand for gold are compiled by GFMS Ltd. 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 should be contacted for further information or for historical data. In addition, certain data are available on Bloomberg.