GOLD, SILVER & PRECIOUS METALS MARKET WRAP

The price of gold has become one of the dominant themes in global markets over the past couple of years as the financial crisis unravelled. The Gold wrap reports on the latest trends in the price of the precious metal as well as factors influencing the demand for the safe haven asset.

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Gold demand grows despite roller coaster price

February 18 2014, 2:57pm
Gold demand grows despite roller coaster price

The World Gold Council’s (WGC) annual report on demand trends for the precious metal reveals the inner workings of the market last year.

While gold’s price endured something of a roller coaster ride, the fundamentals underpinning its value seemed to have been remarkably resilient. 

Last year saw the largest volume increase in jewellery demand for 16 years as consumers across the globe reacted to lower gold prices, the WGC revealed. 

Full year demand was 2,209.5 tonnes, 17% above the 2012 figure and the highest level since the onset of the 2008 financial crisis.

It was a mixed picture for gold as an investment. The documented selling by exchange traded funds (ETFs) was estimated to be just over 880 tonnes.

However this was more than soaked up by private buyers of bars and coins looking to bag a bargain as demand from this source surged to an all-time high of 1,654 tonnes.

The technology sector’s acquisition of gold was stable at just over 400 tonnes of gold, while central banks added to their reserves of the yellow metal, albeit at a slower pace than previous years. 

“[Last year] was the fourth consecutive year of net purchases, albeit at a slightly reduced pace due to the environment of heightened gold volatility and slower foreign reserve accumulation,” it said.

Supply, meanwhile, fell 2% to 4,339.9 tonnes as a drop in recycling, in response to lower gold prices, more than offset growth in mine production, according to the report.

The price an ounce of gold was bobbing around US$1,320 an ounce mid afternoon for a fall of US$9.70.

Juniors Mariana (LON:MARL) and ScotGold (LON:SGZ) topped the sector leader board, while Randgold (LON:RRS) and Petropavolvsk (LON:POG) succumbed to profit-taking.


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