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News: World Gold Council upbeat about the yellow metals prospects in 2015

  1. Gold demand slumped to a five-year low in 2014, according to the industry’s trade body, though it predicts a rebound this year.

    After hitting record highs in 2013, demand for jewellery, coins and bars fell back 4% in 2014 to 3,923.7 tonnes said the World Gold Council, the lowest amount bought since 2009.

    Supply was flat at 4,278.2t tonnes as record mine output was balanced by lower recycling volumes.

    Marcus Grubb, the WGC’s managing director of investment strategy, said it was “unsurprising” demand had dipped following the surge the previous year.

    China was the driver in 2013, but the Chinese consumer’s love affair with the metal has cooled, with jewellery demand in the country down by a third to 624 tonnes.

    Overall jewellery demand fell by 10% even though Indians, the main consumer buyers alongside the Chinese, defied their government attempts to curb imports and increased their purchases by 8%.

    The final quarter was especially strong in India as wedding and festivals demand soared.

    China’s appetite for gold coins and bars saw an even more pronounced fall, with a 50% drop compared to 2013 while demand fell away sharply in Turkey and the US as well.

    Investment buying rose by 2% to 905 tonnes as the pace of sales through exchange traded funds slowed markedly. Central banks bought a record 477 tonnes.

    The WGC is upbeat about prospects this year, predicting a rise in demand between 4,100 – 4,200 tonnes, with Indian demand and a recovery in China to provide the momentum.

    Demand for jewellery demand will revive while a stronger gold market would mean an improvement in investment demand and in exchange-traded funds, it added.

    Gold for April delivery rose 0.1% to settle at US$1,220.70 an ounce on the Comex.

     

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