Gold demand rebounded in the second half of 2015 on sustained buying from central banks and a strong pull in China and India, but the annual demand was virtually flat at 4,212 tonnes with China continuing to be the top buyer, the World Gold Council (WGC) said in its latest demand trends report.
“This was particularly evident in the retail investment sector, where bar and coin purchases were led by China and Europe, with strong support from the US, as investors took advantage of weaker prices amid a softening economic backdrop, financial turbulence and ongoing geopolitical tension,” the report said.
The WGC said the trend is likely to continue as wobbly global financial markets push investors to gold, it said.
It said the global investment demand for the full year 2015 grew by 8 percent to 878t from 815t in 2014. Bar and coin demand remained steady in 2015 as investors took advantage of a weaker price in the third quarter. “The ETF market saw a slowdown in outflows: 133t in 2015, compared to 185t in 2014. The last three months of 2015 witnessed a continuation of these trends with a number of key regions experiencing double digit growth, it said.
According to the report, overall jewellery demand for the full year 2015 was down 3 percent to 2,415t from 2,481t in the previous year. “Following a slower start to the year, the third and fourth quarters combined produced the strongest second half-year total for gold jewellery in 11 years. The last three months of 2015 saw steady levels of jewellery demand, at 671t compared to 677t in the same period last year, with retailers reporting an increase in sales around the Indian festival period.
Central Bank demand for the full year 2015 saw a small uptick from 584t in 2014 to 588t in 2015 as the need for further diversification was reinforced by a tumbling oil price and reduced confidence in the global economy.
In China, which has witnessed economic turmoil, consumer uncertainty and currency weakness, gold demand held up well, particularly in the investment sector up 25% to 48t for the quarter.
“Looking ahead, physical demand will continue to be supported by strong central bank purchases, and continued buying of jewellery, bars and coins by households across the world, led by India and China. If we just look at the year to date, the investment case for gold is as strong as ever. While stockmarkets have wobbled, gold has performed well,” said Alistair Hewitt, Head of Market Intelligence at the World Gold Council.
Full year 2015 saw China (985t) and India (849t) continue their dominance in the global gold market, accounting for close to 45 percent of total global gold demand during 2015, with annual consumer demand in both up 2 percent and 1 percent respectively.
Full year 2015 figures:
- Overall demand was 4,212t, virtually flat when compared to the 2014 figure of 4,226t
- Total consumer demand was 3,427t, a 2% decline compared to 3,481t in 2014
- Global investment demand was 878t a growth of 8% from 815t in 2014
- Global jewellery demand in 2015 was down 3% to 2,415t from 2,481t in 2014
- Central bank demand was virtually flat at 588t compared to 584t in 2014
- Demand in the technology sector was down 5% to 331t from 346t in 2014
- Total supply was down 4% to 4,258t compared to 4,414t in 2014 with total Mine supply down 2% to 3,165t from 3,244t in 2014