Gold Demand Trends Q3 2013

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

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This section of the report considers the main themes to have emerged in global gold demand in Q3 and throughout the year-to-date.

Executive Summary:

The latest report, which covers the period July-September 2013, highlights the resilience of the global gold market in what is traditionally a slower quarter for gold demand. The continued growth in consumer demand across the globe and the strength of Asian gold demand overall, reinforces the patterns first seen at the beginning of 2013, clear evidence of the self-balancing nature of the global market.

Overall demand for gold in Q3 2013 was 869 tonnes, down 21 per cent on the same period a year ago. However, demand remained strong across most countries and sectors. The exceptions were gold-backed exchange-traded funds (ETFs), which had net outflows of 119 tonnes this quarter, compared to 402 tonnes in Q2 2013, and India where the result of government intervention in the Indian gold market was to reduce demand by 71 tonnes this quarter.

Taking the year as a whole so far, the jewellery, bar and coin sectors are showing year-to-date increases, while technology demand remains robust. ETF investment demand is the notable exception, having weakened this year.

Global Gold Market: Third quarter 2013 review

  • Jewellery: The jewellery sector delivered another quarter of solid year-on-year growth as consumers across the globe, encouraged by lower average prices, showed an increasing demand for higher carat pieces.
  • Investment: Demand for bars and coins grew 6 per cent to 304.2 tonnes, with growth mainly coming from Asia and the Middle East, including Turkey. Outflows from exchange-traded funds (ETFs) slowed to 119 tonnes.
  • Technology: Q3 was another period of robust demand for gold in the Technology sector. Demand related to the use of gold in electronics has shown the most resilience, aided by demand for tablets and smart phones.
  • Central Banks: Central banks continued to accumulate gold, albeit at a slower rate than the elevated levels seen in 2012. Year-to-date, global central bank gold reserves have increased by almost 300 tonnes.

Supply: The supply of gold in the third quarter fell by 3 per cent from the same period in 2012. A sharp contraction in the supply of gold from recycling accounted for the decline as mine production increased by 4 per cent.

GDT Q3 2013 infographic

GDT Q3 2013 infographic

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Gold Demand Trends Q3 2013

Marcus Grubb, Managing Director Investment, talks through the findings from Q3 2013 Gold Demand Trends report.

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Demand statistics (in tonnes and value)

      2011 2012 2013 Q4'13 vs Q4'12 4-quarter2
Tonnes 2011 2012 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q31 % chg % chg
Jewellery 1,975.1 1,896.1 472.5 490.4 420.6 461.7 523.4 554.8 603.0 486.7 5 17
Technology 451.7 407.5 103.4 105.8 103.3 102.1 96.2 102.4 104.0 102.8 1 -2
Electronics 319.9 284.5 72.7 73.8 71.4 72.3 67.0 72.0 72.5 72.9 1 -2
Other Industrial 88.9 84.4 20.3 22.0 22.1 20.5 19.9 21.5 22.2 20.6 0 -1
Dentistry 42.9 38.6 10.4 10.0 9.8 9.3 9.4 8.8 9.2 9.3 0 -7
Investment 1,703.8 1,535.5 462.4 398.1 286.6 425.3 425.4 240.0 129.0 185.5 -56 -38
Total bar and coin demand 1,518.7 1,256.4 358.0 344.9 286.7 287.5 337.3 416.5 531.3 304.2 6 24
Physical Bar demand 1,185.8 945.5 281.3 265.6 212.4 213.9 253.5 305.7 394.5 225.2 5 21
Official Coin 245.2 197.5 58.7 52.8 51.4 43.9 49.4 80.1 98.4 63.1 44 41
Medals/Imitation Coin 87.8 113.4 18.1 26.5 22.8 29.7 34.3 30.8 38.4 16.0 -46 23
ETFs & similar products3 185.1 279.1 104.4 53.2 0.0 137.8 88.1 -176.5 -402.2 -118.7 - -
Central bank net purchases 456.8 544.1 112.8 117.8 163.5 112.3 150.4 124.2 79.3 93.4 -17 -12
Gold demand 4,587.4 4,383.2 1,151.1 1,112.3 974.2 1,101.4 1,195.3 1,021.3 915.3 868.5 -21 -8
London pm fix, $/oz 1,571.5 1,669.0 1,688.0 1,690.6 1,609.5 1,652.0 1,721.8 1,631.8 1,414.8 1,326.3 -20 -8
      2011 2012 2013 Q4'13 vs Q4'12 4-quarter2
US$mn 2011 2012 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q31 % chg % chg
Jewellery 99,794 101,745 25,641 26,657 21,767 24,521 28,972 29,104 27,427 20,754 -15 8
Technology 22,823 21,865 5,611 5,752 5,348 5,423 5,325 5,372 4,731 4,385 -19 -10
Electronics 16,164 15,266 3,946 4,010 3,696 3,841 3,708 3,780 3,299 3,110 -19 -10
Other Industrial 4,493 4,530 1,103 1,196 1,142 1,087 1,100 1,130 1,011 877 -19 -9
Dentistry 2,166 2,069 563 546 509 495 518 462 421 398 -20 -15
Investment 86,085 82,393 25,097 21,641 14,833 22,588 23,549 12,591 5,869 7,912 -65 -41
Total bar and coin demand 76,735 67,418 19,431 18,749 14,834 15,272 18,670 21,852 24,166 12,972 -15 14
Physical Bar demand 59,911 50,732 15,267 14,437 10,993 11,360 14,035 16,036 17,944 9,603 -15 11
Official Coin 12,388 10,600 3,184 2,870 2,661 2,333 2,735 4,202 4,477 2,689 15 28
Medals/Imitation Coin 4,436 6,086 980 1,442 1,180 1,579 1,901 1,614 1,745 681 -57 15
ETFs & similar products3 9,350 14,975 5,666 2,892 -1 7,317 4,879 -9,261 -18,297 -5,060 - -
Central bank net purchases 23,081 29,193 6,121 6,404 8,462 5,967 8,323 6,515 3,606 3,983 -33 -17
Gold demand 231,783 235,196 62,470 60,455 50,409 58,499 66,170 53,581 41,633 37,035 -37 -14

 

1Provisional.
2Percentage change, 12 months ended December 2013 vs 12 months ended December 2012.
3Exchange 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: Thomson Reuters GFMS, LBMA, World Gold Council

© Copyright 2014 World Gold Council and Thomson Reuters GFMS [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 Thomson Reuters GFMS. 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. Thomson Reuters GFMS 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.

 

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