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Record Dollar Value Gold Demand In 2012 - India, China and Central Banks Buy

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Gold edged up on Thursday, as bargain hunters showed buying interest and gold was particularly strong in euro terms after data from Europe confirmed the continent remains very vulnerable to economic shocks.

The euro area recession deepened and data showed that the euro area economy shrank the most since 2009 and its three biggest economies, Germany, France and Italy, suffered slumping output.

G20 nations should take a stronger stance against currency manipulation the Russian Finance Minister said this morning after G7 conflicting statements about currency wars in recent days.

Hong Kong opened trading today and is seeing the physical jewellery demand pick up, but the bulk of Asia is still closed for the entrance of the Year of the Snake for the lunar New Year.

U.S. weekly jobless claims are reported at 1330 GMT.    

The world's largest gold-backed ETF, SPDR, said its holdings edged off 0.07% to 1325.99 tonnes on Wednesday from 1326.89 tonnes on Tuesday, but remains near record highs.


Central Bank Gold Demand (1971 to Today)

According to the World Gold Council’s Q4 2012 report issued today, Global gold demand in Q4 2012 reached 1,195.9 tonnes, up 4% from Q4 2011. In value terms gold demand for the quarter was 6% higher year-on-year at $66.2bn marking the highest ever Q4 total and driving annual demand in 2012 to a record value of US$236.4bn.

Gold demand ended a challenging year on a strong note, with a level of demand in Q4 2012 second only to the record level in Q3 2011, highlighting gold’s ongoing attraction and resilience to economic uncertainty. Overall gold demand remains above the five year average with demand in Q4 2012 driven by India, China and the official sector.

In India, investment and jewellery demand reached their highest levels for six quarters with overall demand up 41% on Q4 2011. China recovered from a difficult start to the year, with strong demand in investment and jewellery, both up marginally on the high levels from the final quarter in the previous year. 


Indian Gold Demand (2005 to Today)

Central bank purchasing was up 29% on Q4 2011 marking the eighth consecutive quarter of official sector net purchasing, with full year 2012 seeing the highest levels of central bank purchasing since 1964.

The key findings from the report are as follows:
• Whilst Indian full year demand was down 12% on the previous year, the market performed strongly in the final quarter with total demand at 261.9t, an increase of 41% on the same period last year.  Both jewellery and investment demand reached their highest levels for six quarters. Demand for jewellery was up 35% year-on-year to reach 153.0t, and strong retail demand led to 108.9t of investment buying.  In India the prospect of duty increases, which came in to force in January 2013, may have added to strong buying in the final quarter to beat the anticipated price rises.

• Chinese demand was flat year-on–year, reflecting the impact of economic slowdown. However looking at Q4, total demand was up 1% on the previous quarter to 202.5t. Jewellery demand was137.0t up 1% on Q4 2011 and investment demand was 65.5t, up 2% on the previous year. These increases may reflect the fact that the economic slowdown in China appears to have been shorter than expected.

• Central bank buying for the full year rose by 17% compared to 2011, totaling 534.6t, the highest level since 1964. Central bank purchases stood at 145.0t in Q4, up 29% on the corresponding quarter in the previous year, making this the eighth consecutive quarter in which central banks have been net purchasers of gold. 

• Global investment in ETFs in 2012 was up significantly by 51% on the preceding year, though Q4 was down 16% to 88.1t when compared with the high levels recorded in Q3 2012.

The World Gold Council’s Gold Demand Trends report for Q4 2012 and full year 2012 is now available to download from here.

 

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Fri, 02/15/2013 - 08:14 | 3245794 apberusdisvet
apberusdisvet's picture

What few want to examine re gold is the looming supply problem.  Future global production will decline due to dramatically increased mining costs, declining ore grades, and quite marginal profitability unless, of course the price rises substantially.  Most importantly, the amount available to the "free market" will significantly decline, as major producing countries  keep all mined gold and do not allow exports.  With the currency wars heating up, how long do you think it will take for PM producing countries to nationalize or expropriate their mines?

Fri, 02/15/2013 - 07:01 | 3245748 hmmtellmemore
hmmtellmemore's picture

Gold is not a great investment.  It is a store of value which today is a great store of value as there is a modest investment return YoY.

Fri, 02/15/2013 - 06:36 | 3245729 new game
new game's picture

here we go; all the kings bulls are out sell their book

folks, gold is the best place to store value, but the price in a down draft created by????

sentiment, macro distortion, technical breakdown, swingers-flipsters, whales reducing

and fed sponsored pomo dealers need to keep a lid on pm's to keep 99 percent out of gold.

cash on sideline awaiting next bottom...

still fighting the fed?

Fri, 02/15/2013 - 08:21 | 3245800 Shell Game
Shell Game's picture

I can't wait to hear all the screams of those who were waiting with 'cash on the sidelines' when the last bottom comes and goes and there is no more gold available for delivery.  Considering where the price of gold is inevitably headed (the race to zero of global fiat), gambling over a measly $100 seems foolish. 

A day is coming when the last chair will be claimed, when that day comes you will want all of your claims to be paid in full. 

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