Gold Demand Trends

Gold Demand Trends Q3 2016

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Categories: Gold mining and sustainable development, Supply and demand, Jewellery, Investment, Technology, Reserve asset management

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Global gold demand amounted to 993t in Q3 2016 (-10%), as high gold prices discouraged consumers. ETPs were the only bright spot during the quarter, with 146t of inflows helping to counterbalance weak demand elsewhere, notably in jewellery (-21%), bars and coins (-36%) and purchases by central banks (-51%).

A third successive quarter of growth in ETPs brought cumulative inflows to 725t in 2016 so far. Negative interest rate policies and political uncertainty – linked to the looming Presidential vote in the US and the prospect of European elections next year – were the key factors driving these inflows. In contrast, year-to-date bar and coin demand of 664t was 13% weaker year-on-year.

Total Q3 supply was up 4% to 1,173t (from 1,127t in Q3 2015).
Recycling was the primary driver of this growth, up 30% year-on-year as the higher price encouraged consumers to sell some of their existing gold holdings. Mine production - virtually unchanged year-on-year (-0.5%) – continued to plateau, while Q3 saw net de-hedging (of 15t) for the first time in four quarters.

GDT Q3 2016 - infographic - India stalls

GDT Q3 2016 - infographic - Geopolitical risk

GDT Q3 2016 - infographic - ETP inflows

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Demand statistics (in tonnes and value)

      2014 2015 2016 Q3'16 vs Q3'15
Tonnes 2014 2015 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 % chg
Jewellery 2,479.5 2,390.3 682.0 597.3 513.8 621.6 657.6 481.8 448.7 493.1 -21
Technology 348.4 331.1 89.4 83.3 83.4 82.8 81.6 75.8 79.8 82.4 -1
Electronics 277.5 262.3 71.7 66.3 65.8 65.5 64.7 59.5 62.6 65.1 -1
Other Industrial 50.9 50.0 12.8 12.2 12.9 12.6 12.3 11.8 12.6 12.8 2
Dentistry 19.9 18.9 4.8 4.7 4.8 4.7 4.6 4.5 4.6 4.4 -6
Investment 855.2 923.3 183.9 282.9 186.9 232.4 221.1 603.0 450.6 335.7 44
Total bar and coin demand 1,039.1 1,051.6 276.0 257.2 209.9 295.8 288.7 260.6 213.5 190.1 -36
Physical Bar demand 761.0 761.2 201.4 191.6 150.4 201.2 218.2 200.7 154.0 139.4 -31
Official Coin 204.9 220.2 55.0 51.1 46.0 73.5 49.7 48.7 46.9 34.3 -53
Medals/Imitation Coin 73.1 70.2 19.6 14.6 13.6 21.1 20.8 11.3 12.6 16.3 -23
ETFs & similar products1 -183.8 -128.3 -92.1 25.6 -23.0 -63.4 -67.6 342.3 237.1 145.6 -
Central banks & other inst. 583.9 566.7 133.9 112.4 127.3 168.0 159.0 108.1 81.3 81.7 -51
Gold demand 4,267.0 4,211.4 1,089.3 1,075.9 911.4 1,104.8 1,119.3 1,268.7 1,060.4 992.8 -10
LBMA Gold Price, US$/oz 1,266.4 1,160.1 1,201.4 1,218.5 1,192.4 1,124.3 1,106.5 1,182.6 1,259.6 1,334.8 19
      2014 2015 2016 Q3'16 vs Q3'15
US$mn 2014 2015 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 % chg
Jewellery 100,954.2 89,149.5 26,342.6 23,398.8 19,694.6 22,469.7 23,393.2 18,318.4 18,171.8 21,161.3 -6
Technology 14,183.6 12,350.1 3,453.5 3,261.5 3,198.6 2,994.5 2,902.5 2,881.2 3,230.0 3,534.0 18
Electronics 11,299.8 9,781.2 2,771.2 2,596.4 2,522.2 2,367.3 2,301.3 2,260.7 2,533.8 2,793.2 18
Other Industrial 2,072.8 1,865.4 496.2 479.9 493.8 456.3 436.2 448.5 511.4 550.0 21
Dentistry 811.0 703.5 186.0 185.2 182.6 171.0 165.1 172.0 184.8 190.8 12
Investment 34,822.1 34,434.6 7,104.2 11,082.0 7,165.3 8,399.2 7,865.1 22,926.0 18,247.8 14,404.2 71
Total bar and coin demand 42,307.2 39,221.4 10,660.9 10,077.5 8,048.2 10,690.7 10,268.4 9,909.9 8,644.6 8,156.8 -24
Physical Bar demand 30,984.5 28,391.1 7,780.6 7,503.8 5,763.7 7,271.2 7,760.9 7,631.0 6,235.0 5,984.2 -18
Official Coin 8,344.4 8,213.7 2,125.1 2,000.5 1,762.6 2,656.7 1,767.4 1,850.0 1,899.6 1,473.7 -45
Medals/Imitation Coin 2,978.4 2,616.6 755.1 573.2 521.9 762.8 740.1 428.9 510.0 698.9 -8
ETFs & similar products1 -7,485.2 -4,786.8 -3,556.6 1,004.6 -883.0 -2,291.5 -2,403.3 13,016.1 9,603.2 6,247.4 -
Central banks & other inst. 23,774.0 21,137.3 5,173.5 4,404.9 4,879.1 6,071.4 5,657.9 4,111.2 3,293.2 3,504.3 -42
Gold demand 173,733.8 157,071.5 42,073.8 42,147.2 34,937.6 39,934.9 39,818.6 48,236.9 42,942.8 42,603.9 7

1For a listing of the Exchange Traded Funds and similar products click here for more information.

Source: Metals Focus; GFMS, Thomson Reuters; ICE Benchmark Administration; World Gold Council

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