The World Gold Council’s Gold Demand Trends (GDT) is the leading industry resource for data and opinion on world-wide gold demand.
The second quarter saw a continuation – and amplification – of Q1 trends: a multi-year high in the jewellery sector; China and India cementing their position as leading markets; contrast between different elements of investment demand; and a flow of gold from West to East.
In a turbulent quarter, demand fell by 12% to 856 tonnes. A wave of outflows from ETFs was the principal cause of the
decline, although this was mitigated by record demand for gold bars and coins. Western investors reacted to a seemingly more positive outlook for the US economy and news of an eventual tapering of quantitative easing by selling gold ETFs.
Please note many believe the outflows from gold ETFs should not be viewed entirely as declining demand. Some portion of those outflows are likely to be investors selling paper for real physical gold or actual physical being used to satisfy delivery requirements of the bullion banks, all of whom have serious problems with declining vault inventory.
Jewellery: Multi-year high in the jewellery sector as lower prices generated a surge in demand from consumers.
Investment: Record demand for gold bars and coins was countered by sizeable net outflows from ETFs, resulting in a year-on-year decline in overall investment demand relative to Q2 2012.
Technology: Technology sector saw marginal growth, the 1% year-on-year increase the first in two years.
Central Banks: Central banks demand slowed in Q2 2013 from record quarter in year previous, marking tenth consecutive quarter of purchases.
Supply: Total gold supply shrunk 6% from Q2 2012, almost solely due to the reduction in recycling
Latest statistics on gold’s global supply and demand. View Q2 2013 Gold statistics.
I believe that precious metals have bottomed, as we are seeing a powerful breakout from oversold lows. Several of the stocks in the Gold Stock Bull portfolio/newsletter have advance by double digits in the past few weeks alone. We have been scaling into new positions over the past few months and will continue to do so in the coming weeks if prices hold above key technical support levels.
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