WGC 2014 Gold Trends Report

Whilst it has its technical detractors*, the World Gold Council’s annual Gold Demand Trends report is the most recognised for demand and supply across sectors and regions.  Here are the key takeaways:

• Jewellery demand was down 10% to 2,153t but still above the 2,053t 5 year average
• Investment demand was up 2% to 905t and the big 2013 ETF outflows fell in 2014.
• Technology demand fell 5% to 389t as poor economic conditions and substitution continue to weigh
• Central bank purchases grew an incredible 17% to 477t, the second highest on record.  The previous high was 2012, another year of global economic uncertainty where CB’s look for the safety of gold to protect their sovereign wealth.
• Asia’s share of global consumer demand has grown from 47% to 60% in just 5 years.
• Supply was steady at 4,278t comprising a record high 3,114t of mine supply and a 7 year low of recycled gold at 1,164t.  Low prices mean fewer look to sell for recycling and miners need to up production for cashflow to survive plus new mines have come on stream.  Plenty of data still suggests 2015 may be the ‘peak gold’ year though.

* WGC only have Chinese gold demand at 867t in 2014 (667t of that in the form of ‘jewellery’ as the Chinese prefer ornate gold over bars) which is over 200t short of Koos Jansen’s calcs out of the Shanghai Gold Exchange figures.