The latest World Gold Council Gold Demand Trends report, which reports on the period January-March 2013, shows a market driven by diverse global demand, and an appetite for owning gold jewellery that continues to grow.
Total jewellery demand was up 12% year-on-year in Q1 2013, driven in the main by Asian markets. Jewellery demand in China was up 19% on the same period last year and stood at a record 185 tonnes(t). Demand in both India and the Middle East was up 15% respectively and in the US, demand showed a significant increase, 6%, for the first time since 2005.
Demand for gold in China and India was also driven by an increase in bar and coin sales – up 22% year-on-year in China and 52% in India. In the US demand for bars and coins was up 43% compared with the same quarter in 2012. Globally, bar investment was up 8% while official coins (such as American Eagles and Canadian Maple Leafs) were up 18%. Gold held by gold-backed ETFs, which in 2012 accounted for 6% of the world’s gold demand, fell by 177t.
Central Banks remained significant acquirers of gold, making purchases in excess of 100t (109t) for the seventh consecutive quarter.
Overall total global demand for gold in Q1 2013 was 963t, down 19% from Q4 2012.
Marcus Grubb, Managing Director, Investment at the World Gold Council commented:
“The price drop in April, fuelled by non-physical moves in the market, proved to be the catalyst for a surge of buying that has left many retailers short of stock and refineries introducing waiting lists for deliveries. Putting this into context, sales of bars and coins, jewellery and consumption in the technology sector still make up 81% of the market.
“What these figures show is that even before the events of April, the fundamentals of the gold market remain robust with; growing demand in India and China, central banks consistently adding gold to their reserves and strong buying of investment products such as gold bars and coins.”
In value terms, gold demand in Q1 2013 was US$51bn, down 23% compared to Q4 2012. The average gold price of US$1,632/oz was down 5% on the average Q4 2012 price, and down 3% on the same period the previous year.
The key findings from the report are as follows:
- Total demand in China totalled 294t in the first quarter, a rise of 20% on the same quarter last year, as the economy continued to pick up from the downturn experienced in the second half of 2012. Of that figure, jewellery demand in the quarter was a record 185t, up 19% on last year, while bar and coin investment was 110t, rising by 22% from last year.
- The Indian market also demonstrated a continued appetite for gold. Total demand was 257t, up 27% on the same quarter last year. Retail investment was up 52% while jewellery was up 15% on Q1 last year.
- Q1 2013 was the seventh consecutive quarter in which central banks acquired more than 100t of gold, and the ninth consecutive quarter in which central banks have been net purchasers as they diversify their portfolios. Central bank net purchases were 109t in Q1 2013, although the figure was 5% lower than the purchases a year ago.
- ETFs saw a net outflow of 177t in the quarter. By contrast there were strong inflows into other forms of investment: bar and coin demand was 378t, 10% higher than last year.
Marcus Grubb, Managing Director, Investment, at the World Gold Council commented further:
“Gold-backed ETFs, which made up 6% of gold demand in 2012, have seen some holders, primarily in the US, collect profits and move into equities. While gold ETF holdings are down, this has been balanced by 378t of investment in bars and coins, an increase of 10% on the same period last year, and up 12% on Q4 2012.
“Overall, the long-term appetite for investment remains strong, demonstrated by the continued demand for bars and coins.”
Gold demand and supply statistics for Q1 2013
- First quarter gold demand of 963t was down 13% compared with Q1 2012
- The value measure of gold demand in Q1 2013 was US$51bn, down 16% on the year before
- The Q1 2013 average gold price was US$1,632 down 3% on the year before
- The net outflow from ETFs was 177t in the quarter. That fall pushed the sum of ETF and total bar and coin demand to just below 201t. Total investment demand was 320t in Q1 2013, flat compared with a year ago
- Demand in the jewellery sector was up 12% to 551t. Jewellery demand in China was 185t while demand in India was 160t
- Demand in the technology sector once again surpassed 100t for the quarter Demand in Q1 2013 was 102t, down 4% on the previous year
- The Q1 2013 total mine production was up 4% on last year at 688t. Recycling fell 4% resulting in a total supply that is 1% higher than a year ago
- Net central bank purchases totalled 109t, 5% lower than a year ago, making this the ninth consecutive quarter in which central banks have been net purchasers of gold