Gold Supply and Demand – Q2 2010

Outlook

We recently published the latest issue of Gold Demand Trends for Q2 2010, which suggests demand for gold for the rest of 2010 will be underpinned by the following market forces:

• India and China will continue to provide the main thrust of overall growth in demand, particularly for gold jewellery, for the remainder of 2010. 
  
  
• Retail investment will continue to be a substantial source of gold demand in Europe.
  
  
• Over the longer-term, demand for gold in China is expected to grow considerably. A report recently published by The People’s Bank of China and five other organisations to foster the development of the domestic gold
  market will add impetus to the growth in gold ownership among Chinese consumers.
  
  
• Electronics demand is likely to return to higher historic levels after the sector exhibited further signs of recovery, especially in the US and Japan.
  
  Key demand statistics
  
• Total gold demand  in Q2 2010 rose by 36% to 1,050 tonnes, largely reflecting strong gold investment demand compared to the second quarter of 2009.  In US$ value terms, demand increased 77% to $40.4 billion.
• Investment demand  was the strongest performing segment during the second quarter, posting a rise of 118% to 534.4 tonnes compared with 245.4 tonnes in Q2 2009. 
  The largest contribution to this rise came from the ETF segment of investment demand, which grew by 414% to 291.3 tonnes, the second highest quarter on record.
• Physical gold bar demand, which largely covers the non-western markets, rose 29% from Q2 2009 to 96.3 tonnes.
• Global jewellery demand remained robust in Q2 2010. In the face of surging price levels, consumption totalled 408.7 tonnes during the second quarter of 2010, just 5% below year-earlier levels.
• Gold jewellery demand in India, the largest jewellery market, was little changed from year-earlier levels, down just 2% at 123.0 tonnes.  In local currency terms, this translates to a 20% increase in the value of demand to Rp216 billion.
• China saw demand for gold jewellery increase by 5% to 75.4 tonnes . While growth in demand in tonnage terms was hindered by extreme weather conditions, the growth in the local currency value measure of demand was 35% to RMB 19.8 billion.
• With the return of demand for consumer electronics, industrial demand grew by 14% to 107.2 tonnes, compared to Q2 2009.  

Read more about Gold Demand Trends in our detailed report, which also includes commentary on supply.

Press release: Investment demand will continue to support robust gold market during 2010

Data on the supply and demand for gold are compiled by GFMS Ltd. The company provides a number of tables exclusively for the World Gold Council. The following table shows a summary of gold demand. Links to more detailed tables, and to notes and copyright information, are given below. Please note the restrictions on disseminating these data.

Supply and demand statistics files

End-use consumption (tonnes) This provides details of jewellery consumption, industrial and dental fabrication, and all categories of investment which are statistically identifiable.

End-use consumption ($m) Similar information in US dollars.

Supply and demand (tonnes) In addition to a summary of demand information this also shows the categories of supply: mine output, net hedging or de-hedging by mining companies, scrap and net central bank sales.

Notes and copyright information

 

Identifiable gold demand ¹

Notes: Source: GFMS Ltd. 1. Identifiable end-use consumption excluding central banks. 2. Provisional . 3. “Other retail” excludes primary coin offtake; it represents mainly activity in North America and Western Europe.  4. Exchange Traded Funds and similar products including: Gold Bullion Securities (London), Gold Bullion Securities (Australia), SPDR® Gold Shares (formerly streetTRACKS Gold Shares), NewGold Gold Debentures, iShares Comex Gold Trust, ZKB Gold ETF, GOLDIST, ETF Securities Physical Gold, ETF Securities (Tokyo), ETF Securities (NYSE), XETRA-GOLD, Julius Baer Physical Gold, Central Fund of Canada, and Central Gold Trust, Swiss Gold, Claymore Gold Bullion ETF, Sprott Physical Gold Trust, Credit Suisse Xmtch and Dubai Gold Securities.

© Copyright 2010 World Gold Council and GFMS Ltd. All rights reserved.

Data on the supply and demand for gold are compiled by GFMS Ltd. The company provides a number of tables exclusively for the World Gold Council. Please refer to the notes and copyright information for details regarding the restrictions on disseminating these data. GFMS should be contacted for further information or for historical data. In addition, certain data are available on Bloomberg.