Gold jewellery demand down 10% in 2014 WGC report

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World Gold Council positive as Q4 2014 demand up 6% year-on-year.

The World Gold Council has release its annual report for 2014, highlighting a stabilisation of the gold market but a decreased demand for gold jewellery in comparison to 2013.

The report is said to show a stabilisation of the market as it recovered from the extremes of 2013, with demand falling 4% to 3,924 tonnes. However, the year ended strongly with gold demand rising 6% in Q4 compared to the same period in 2013. This is thought to be due to a rising demand in the jewellery and central banking sectors.

Overall, jewellery remains the biggest source of demand for gold globally, with total jewellery demand for 2014 down 10% to 2,153 tonnes compared to the previous year.

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India – one of the two largest gold markets in the world – had its strongest year for jewellery demand since the World Gold Council’s records began in 1995, up 8% on a year ago to 662t. This was driven by wedding and festival buying despite the presence of government restrictions on gold imports for most of the year.

Although China saw demand decline 33% year-on-year, it still represents the second best year for jewellery demand in China since our records began.

There was also strong jewellery demand in the UK and the US, up 18% to 28 tonnes and 9% to 132 tonnes respectively. This was driven by improved economic performance in both regions.

Total supply in 2014 was virtually unchanged compared to 2013 at 4,278 tonnes, as recycling contracted to a seven year low, offsetting annual mine production growth, which was up 2% to a record 3,114 tonnes.

Marcus Grubb, managing director of investment strategy at the World Gold Council, commented: “2014 was a year of stabilisation and innovation in the gold market, with annual gold demand down by just 4% after the record-breaking level of buying seen in 2013. It was a standout year for Indian jewellery, despite government restrictions on gold imports, reinforcing the nation’s affinity with gold. Meanwhile Chinese gold demand returned to those last seen in 2011/2012 as consumers and investors took time to digest the substantial volumes accumulated in 2013.

“What’s particularly notable about 2014 is that the striking shift in physical gold demand from West to East is now being followed by gold infrastructure development in Asia. New products and trading platforms were introduced like the Shanghai Gold Exchange International Board, the ‘Gold Send’ mobile app in Turkey and the new kilobar contracts in Singapore and Hong Kong – all designed to make gold more accessible to greater numbers of buyers in the East.”

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