World Gold Council: Gold Demand Trends

[pmbug]

Yesterday the World Gold Council released its “Gold Demand Trends” for Q4 and full year 2011, billed as “the leading industry resource for data and opinion on world-wide gold demand.” Among the headline numbers, gold demand last year reached 4,067.1 tonnes – the highest level since 1997, with investment demand rising by 5% and hitting a new record high of 1,640.7 tonnes. Gold mine output increased 4% to a new annual record of 2,809.5 tonnes.

Gold recycling – which accounts for the gap between gold mine output and total demand – fell by 2%. This is the second yearly fall in this stat since the peak of 1,694.7 tonnes was reached in 2009. Consider though that recycled gold accounted for just 800 tonnes (roughly) of supply in 2002. People are selling gold for money, rather than looking to buy gold as a store of value and means of increasing their purchasing power. Anecdotally, the evidence for this confronts you every time you visit your local shopping mall: you may find kiosks and shops offering to buy gold in exchange for cash, but precious few looking to do the reverse transaction.
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http://www.goldmoney.com/gold-resea...ncil-data-supports-bullish-case-for-gold.html

Fools!



It is heartening to see investment demand outstripping production though.

 

[ancona]

Those people selling their gold are exactly the same people who will be lining up and waiting for the FEMA truck to take them to "safety" when the shit hits the fan. They are also the uninformed sheep the government is so fond of. These same folks are probably also ill prepared and living one or two paychecks away from destitution.

 

[dali lambone]

Yeah, these sellers I just don't get. They have to be strapped for cash right now or something. I was in my LCS in Virginia a few weeks back. I was bored that day and thought I'd go buy a few eagles. I literally waited in line almost an hour because there were so many people selling their coins and jewelry, and the spot was several days down! I just sat back and shook my head thinking that these guys were really going to be needing that gold and silver in the next few years. It was almost sad to think of how bad these average people are screwing themselves.

I have been to that shop maybe 4 or 5 times. I am the only person I have ever seen that actually made a purchase. Everyone else is selling and it's getting sent off as scrap to get resmelted.

 

[white&yellow999]

I was in my LCS in Virginia a few weeks back. I was bored that day and thought I'd go buy a few eagles. I literally waited in line almost an hour because there were so many people selling their coins and jewelry, and the spot was several days down! I just sat back and shook my head thinking that these guys were really going to be needing that gold and silver in the next few years. It was almost sad to think of how bad these average people are screwing themselves.

I have been to that shop maybe 4 or 5 times. I am the only person I have ever seen that actually made a purchase. Everyone else is selling and it's getting sent off as scrap to get resmelted.

Same here, two of the three LCS near me I have to wait all the time to be helped because there are so many people selling, it's crazy. Then you get crazy looks from the people selling, when the shop owner looks at you and says, "How many oz's do you need today?". I have even had to wait after the shop closed because so many people were selling.

Too many people are selling for gold and silver to be a bubble; bubbles require public participation buying. Everywhere I turn I am seeing people selling so IMO so it's looking hopeful.

Oh btw I'm sure most of you saw this on ZeroHedge but this is for the one's who haven't.

 

[DSAbug]

Awesome video. hadn't seen it. thanks

 

[KMS]

Yarp. good vid.

 

[bushi]

Question: what about Chinese gold production - I've read a report, that they are the biggest gold diggers, "something slightly above 300 tonnes/yr, 50% more yearly production over next in line, Australia". The same report states, that no single OZ of this production can be sold to anyone else, but Chinese govt. And last time I checked, Chinese CB is rather not selling any of their gold - which means they are adding quickly to their gold reserves, from both sides - market, AND their own extensive mining.

Can anyone share some thoughts on that?

 

[pmbug]

Figures on Chinese production and central bank buying are not transparent. Know one (in the west) really knows.

 

[pmbug]

Reporting from Beijing— A bit player only a decade ago, China has emerged as one of the most important forces in the global gold market, helping fuel the rising value of the precious metal.

Already the world's largest producer — it overtook South Africa in 2007 — China is now bedecking itself in bling. It's on track to become the globe's largest consumer of gold as early as this year, knocking off India — whose elaborate wedding dowries kept it on top for years.

Some of China's gold is going to its central bank as the government quietly boosts reserves. But the biggest driver is Chinese consumers. They're snapping up jewelry, coins and bars as a hedge against inflation and to flaunt their rising wealth.

To witness the frenzy firsthand, head to Beijing's Caishikou Department Store, a four-story gold emporium that rang up sales of $1.5 billion last year. Visitors be warned: sharpen your elbows and be ready to push.
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Chinese demand reached nearly 770 metric tons last year, up 20% from the year before, according to the World Gold Council in London. Desire for the yellow metal is so strong that China is buying record amounts from abroad because its mines can't keep pace. China imported more gold than India in the fourth quarter of 2011.
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In addition, Chinese consumers eventually were allowed to purchase bullion through commercial banks. Today China accounts for 26% of global gold demand, up from 6% a decade ago.

"Chinese demand has traded positions with the U.S. in the last decade," said Albert Cheng, Far East managing director of the World Gold Council. "It's very clear the gold market is moving east."
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More: http://www.latimes.com/business/la-fi-china-gold-20120227,0,4040073.story

PAGE is going to be [Donald Trump]huge[/Donald Trump].

 

[KMS]

They're smart. They had to print money because Ben printed, but at least they are turning those dollars around and putting them in gold while a dollar still buys it.

 

[swissaustrian]

Here's the full report of the world gold council as a pdf:
http://www.gold.org/download/latest/gold_demand_trends/

 

[ancona]

Question: what about Chinese gold production - I've read a report, that they are the biggest gold diggers, "something slightly above 300 tonnes/yr, 50% more yearly production over next in line, Australia". The same report states, that no single OZ of this production can be sold to anyone else, but Chinese govt. And last time I checked, Chinese CB is rather not selling any of their gold - which means they are adding quickly to their gold reserves, from both sides - market, AND their own extensive mining.

Can anyone share some thoughts on that?

Bushi,
All the gold mined in China stays in China. Until they begin to export, which will likely be never, their production wqill not have any impact on world gold markets. Period. They consistently understate their reserves, which I personally believe to be many multiples of what they publicly declare. In face, i believe they are in the process of building enough of a reserve to return to a precious metal standard.

They have gone around the world using their dollar reserves to buy up natural resources like a plague of locusts, and are shipping every ounce of gold, silver, tin, oil and lumber back home for consumption.

Chins, as I have posted before, plans for the next hundred years, while the USA plans for the next election cycle.

 

[bushi]

i believe they are in the process of building enough of a reserve to return to a precious metal standard.

...that is what I was thinking, too. They might want to set Yuan free at some stage, to make it one of the world reserves currency, and being backed by gold (at least partially, I think), could make it self-reinforcing currency (kind of like CHF did recently, insanely strong - more demand, for safety reasons => yuan appreciation => relative weakening of the dollar/western fiat => further appreciation of Chinese CB's gold pile in relation to western fiat => self-fulfilling prophecy & closed circle). However, Chinese have active interest in yuan being artificially low, as of date - so they can be competitive with their exports. It would mean, they'd need to switch from current policies of aggressive yuan undervaluation/aggressive exports. Won't happened overnight nor this year, but maybe somewhere in the not so distant future. Was just curious if anybody here had any good/plausible sources of information/research/analysis on that.

Another thing - Chinese are scooping everything that is available for sale in natural resources, how long you think before they start taking on board under-performing gold miners stock?

 

[swissaustrian]

Q3 2012 demand data:
http://www.gold.org/video/play/gold_demand_trends_q3_2012/

 

[pmbug]

* bump *

Q1 gold demand (excluding OTC demand) slipped 5% y/y to 1,102t, due to continued ETF outflows. Inclusive of sizable OTC buying by investors, total gold demand increased 3% y/y to 1,238t – the strongest first quarter since 2016.

Q1 saw no let-up in the pace of central bank gold buying: 290t (net) was added to official holdings, only part of which is currently reflected in IMF data.

Bar and coin demand matched the previous quarter at 312t, translating to a 3% y/y increase.

Global gold ETF holdings fell by 114t. Europe and North America both saw quarterly outflows, slightly countered by inflows into Asian-listed products. US-listed funds saw a positive shift late in the quarter.
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More:

Gold Demand Trends Q1 2024

www.gold.org