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Total gold bar and coin demand worldwide ROSE a staggering 28% in 2013 – and now ETFs are buying again in 2014

The full year 2013 gold demand numbers have just been released by the World Gold Council. And as we pointed out during the quarterly reports all throughout last year, they show record amounts of physical buying of bullion, whilst the paper variety, ETFs, were sold hard.

From the report:

2013 proved to be the year of the consumer, with gold jewellery demand close to pre-crisis levels and investment in small bars and coins hitting a record high.

But despite that record physical buying, the gold price fell nearly 30% last year, here’s why:

However, outweighing the impressive consumer demand were the effects of ETF outflows and lower central bank buying, resulting in 2013 demand 15% below the strong volumes recorded
in 2012.

Which all means that gold saw a rise in demand of 21% from consumers, whilst ETFs saw ‘large-scale outflows:

The gold market became polarised in 2013 as 21% growth in demand from consumers and value-seeking investors contrasted with large-scale outflows from ETFs. The net result was a 15% decline in full-year gold demand in a year where jewellery, bar and coin demand reached an all-time high.

And here are the full numbers for 2013:

total gold demand for 2013(click for sharper image)

Jewelry demand rose from 1,896.1 tonnes in 2012 to 2,209.5 tonnes in 2013 a rise of 17%.

Total gold bar and coin demand went from 1289 tonnes in 2012 to 1654.1 tonnes in 2013 – this is a rise of 28%

The reason for total gold demand to be down is ETF paper gold selling, something that we saw happening throughout 2013.

If we strip out the ‘paper’ demand for gold we can see that in 2012 the number would’ve been 4136.7 tonnes (4,415.8 – 279.1) and in 2013 the number would’ve stood at 4564.9 tonnes (3,756.1 + 808.8), UP some 10% for the full year.

And all this increase in demand has happened in the face of a gold price falling nearly 30% over the same timeframe – clearly the ETF selling was a (if not ‘the’) major factor in the price fall last year.

We can see that central banks continue to be net buyers of gold.

central bank buying gold 2013(click for sharper image)

And Chinese demand is nearly off the charts:

total demand 2013 china(click for sharper image)

Clearly, rather than there being a ‘bear’ market in gold, these physical demand numbers show the complete opposite is the actual truth – the world hasn’t fallen out of love of gold, how can it have when the world just bought more physical gold than in any other year?

It’s really is down to ETF gold being sold – so just what has been happening in the gold ETF space so far in 2014, because when the ETFs start buying gold again, the affect of the price of gold will as dramatic to the upside as it was to the downside last year.

etf gold feb 2014(click for sharper image)

Gold is starting to be bought by gold ETFs – the first time this has really happened since October 2012. From Fox Business:

Since the start of the year there has been a slight change in attitude towards gold and you can see that with the CFTC (Commodity Futures Trading Commission) positioning or a sharp slowdown in ETF (exchange-traded fund) outflows over the past month,” Citi analyst David Wilson said…

Holdings in SPDR Gold Trust, the world’s largest gold-backed ETF, rose 7.49 tonnes to 797.05 tonnes on Friday, the first increase in a month.

Keep an eye on the inflows into gold ETFs in 2014 – if they keep adding in the coming months, that cyclical bear phase can finally be called ‘over’ – a very ‘odd’ bear market, one where the demand for the underling physical metal went through the roof.

Link to this article: : http://www.goldmadesimplenews.com/gold/total-gold-bar-and-coin-demand-worldwide-rose-a-staggering-28-in-2013-and-now-etfs-are-buying-again-in-2014-12532/

Posted by on Feb 19 2014. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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