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Last updated: February 14, 2013 at 15:25 pm

Gold Demand at all time high in 2012, India/China Drive Growth!

Notwithstanding the sluggish economy through-out the world, Gold hit record demand levels as per report released by World Gold Council. In value terms, gold demand in 2012 was USD 236.4 billion – an all-time high. In final fourth quarter of 2012, Gold demand in was 6% higher year-on-year at USD 66.2 billion, marking the highest ever Q4 total.

In Q4, 2012 global gold demand was was 1,195.9 tonnes, increase of about 4% compared to same quarter the previous year. In Q4 2012, the average gold price reached a record level of USD 1,721.8 per ounce, up 1% and the average price during whole of 2012 was USD 1,669.0 per ounce, up 6% from USD 1,571.5 per ounce in 2011.

Gold Demand in India

China and India are the global gold power houses, that too by a very large margin and despite challenging domestic economic conditions, both countries saw increase in demand in Q4, 2012.

In India, though the gold demand for full year was down 12% compared to previous year, it performed strongly in the final quarter with total demand at 261.9 t, an increase of 41% on the same period last year.

Gold Demand Q4 2012

As you can see from the chart above, India and China are the largest consumers of Gold. India alone accounts for more than one-fifth of world’s gold consumption.

Gold Demand Key Findings

  • In India, demand for jewellery was up 35% year-on-year to reach 153.0 tonnes
  • Gold investment buying accounted for 108.9 tonnes in India.

India Consumer Demand

  • Globally, the Investment demand (the sum of ETFs and total bar and coin demand) was 424.7 tonnes, down 8% compared to the same quarter last year, but was 19% above the five year quarterly average
  • Overall, demand in the jewellery sector was up 11 percent to 525.3 tonnes compared to 472.4 tonnes in the same quarter in 2011.
  • Technology gold demand for the full year in 2012 was down 5% on 2011 in tonnage terms.

Gold Demand by Category

  • Supply of gold from mines was up 2% year-on-year, while recycling was down 5% against the same period.
  • Central bank Gold buying for the full year rose by 17% compared to 2011, totaling 534.6 tonnes, the highest level since 1964.

Visit World Gold Council Website for full detailed report.

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  • What I feel is the present stagnation in gold is temporary. May be this coming budget will boost industrial growth reducing investment in gold. But at macro level, the factors to be considered are : 1) China diversifying its foreign currency holdings from US bonds to gold, 2) Chinese retail consumption of gold (which is growing faster than Indian retail consumption) 3) Indian demand either stable or increase in future (considering good budget and resulting prosperity) 4) Global production will decrease soon (once Chinese mines dry up) Just my two paisa :)

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