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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.

Gold demand of 3,756.1 tonnes in 2013 was worth US$170.4bn. Consumers generated exceptional levels of demand, with jewellery at its highest since the onset of the financial crisis in 2008 and investment in small bars and coins hitting a record high. This was in contrast to large-scale outflows from ETFs, due to a number tactical western investors liquidating their positions as US economic sentiment improved. Central banks made healthy purchases of 368.6 tonnes, the fourth consecutive year of positive demand. The net result was a 15% decline in overall gold demand from 2012.

Gold should not be seen in isolation but as a strategic component in portfolios. It protects purchasing power and helps manage risk.

This fourth edition of Gold Investor includes two articles: I. Why Invest in gold? Gold’s role in long term strategies; II. Gold and currencies: the evolving relationship with the US dollar.

The role of gold and its benefits have been largely debated within the investment community. Throughout its two articles, Gold Investor highlights the benefits of investing in gold in the context of investment portfolios and details the past, current and future relationship between gold and the US dollar.