18/2/2014: Gold Demand Trends 2013

The World Gold Council released its annual (2013) report on Gold Demand Trends (GDT). link: http://www.gold.org/investment/statistics/demand_and_supply_statistics/

Highlights are:

• Jewellery: 2013 saw the largest volume increase in jewellery demand for 16 years as consumers across the globe reacted to lower gold prices. Full year demand was 2,209.5t, 17% above 2012 and the highest level since the onset of the 2008 financial crisis.
• Investment: 2013 was a year of contrast between the different elements of gold investment. Demand for bars and coins surged to an all-time high of 1,654.1t as individual investors took advantage of lower prices, while large-scale selling of more tactical ETF positions by western investors generated outflows of 880.8t.
• Technology: Annual demand for gold used in technology stabilised at 404.8t, from 407.5t in 2012. The lower price environment and improved global economic outlook was supportive for gold used in a range of applications in the sector.
• Central Banks: Net purchases by central banks increased global official gold reserves by 368.6 tonnes. 2013 was the fourth consecutive year of net purchases, albeit at a slightly reduced pace due to the environment of heightened gold volatility and slower foreign reserve accumulation.
• Supply: In 2013 the supply of gold declined 2% to 4,339.9t as a drop in recycling activity (in response to lower gold prices) more than offset growth in mine production.

Total demand is 3,756.1 tonnes against 4,415.8 tonnes in 2012 down 14.9% y/y, of which ETFs and similar investment funds' purchases declines accounted for 880.8 tonnes in 2013 against a rise of 279.1 tonnes in 2012. Thus, the decline of 659.7 tonnes y/y was more than accounted for by the net swing in demand from ETFs of -1,159.9 tonnes.

Total bar and coin demand for investment purposes, however, rose from 1,289 tonnes in 2012 to 1,654.1 tonnes in 2013.