Q1 2015 Gold Demand Trends - WGC

Yesterday saw the release of the World Gold Council’s First Quarter 2015 Gold Demand Trends report.  Their key takeaways were:

• Jewellery demand dipped by 3% in Q1 2015 to a shade above 600t 
  Jewellery demand for the first quarter totalled 601t, a level it has adhered to reasonably firmly since Q3 2013. Demand began the year by responding, in varying degrees according to specific local market conditions, to economic growth and price movements.  Of the total 601t, China accounted for 229t and India 151t.

• Investment demand rose 4% as ETF inflows offset a decline in bar and coin demand 
  Total investment demand grew moderately to 279t in Q1, slightly above Q1 demand in both 2013 and 2014 (at 260t and 268t respectively). The first quarterly inflow into ETFs since Q4 2012 outweighed a contraction in bar and coin investment.  Investment was up a considerable 63% over the previous quarter though.  Of the 253t of Bar and Coin demand, China accounted for 59.7t and India 40.9t.

• Central bank net purchases of 119t extend buying run to 17th consecutive quarter 
  Central banks and other official institutions continued their buying momentum in Q1 with net purchases totalling 119 tonnes. This was virtually unchanged compared to the same period in 2014. Diversification continues to be the primary driver for the accumulation of gold reserves.

• Technology slipped 2% to 80 tonnes as longer-term substitution trend continues 
  Demand for gold in technological uses slipped by 2% to 80 tonnes, the lowest quarterly level in our records (back to 2000). Substitution and thrifting in this sector continue to weigh on gold demand, as manufacturers seek out cheaper alternatives.

• Total supply was virtually unchanged year-on-year at 1,089t; lower recycling offset growth in mine supply. 
  Mine production increased by 2% year-on-year to 729t in the first three months of 2015, with growth coming from a number of markets. This was offset by recycled gold supply, which fell by 3% to 355t in Q1. Overall, this left total supply virtually unchanged at 1,089t.  WGC maintain their stance that the second half of 2015 will see the start of declining mine production.