World Gold Council: Full Year 2013 Gold Demand Trends

1. Gold Demand Trends
Full year 2013
19th February 2014

2. Disclaimer
Sources, copyright and disclaimer
© 2014 World Gold Council. Where expressly identified as such, the gold supply and demand statistics contained in this report were complied by Thomson Reuters GFMS. Thomson
Reuters GFMS retains all rights in such statistics © 2014.
This presentation is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to
buy or sell, gold, any gold related products or any other products, securities or investments. It does not, and should not be construed as acting to, sponsor, advocate, endorse or promote
gold, any gold related products or any other products, securities or investments.
This presentation contains forward-looking statements. The use of the words “believes,” “expects,” “may,” or “suggests” or words of similar import, identifies a statement as “forwardlooking.” The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based
on the analysis of the World Gold Council. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market
conditions all of which are difficult or impossible to predict accurately. In addition, the demand for gold and the international gold markets are subject to substantial risks which increase
the uncertainty inherent in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation by the World Gold Council that the forward-looking statements will be achieved. We caution you not to place undue reliance on our
forward-looking statements. Except in the normal course of our publication cycle, we do not intend to update or revise any forward-looking statements, whether as a result of new
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This presentation does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of gold, any gold
related products or any other products, securities or investments, including without limitation, any advice to the effect that any gold related transaction is appropriate for any investment
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Expressions of opinion are those of the author and are subject to change without notice.
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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3. Agenda
• Summary of full year 2013
• Summary of India and China
• Review of demand
- Jewellery
- Investment
- Central Banks
- Technology
• Review of supply
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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4. Introduction
Summary of the full year 2013
Marcus Grubb
4

5. Summary of gold demand and supply
Tonnes
2012
2013
Gold demand
4,470.4
3,744.5
Q1'13
Q2'13
-16%
1,032.2
1,007.4
898.5
806.4
-55.2
595.4
-
3.0
11.6
263.5
317.2
Total demand (fabrication basis)
4,415.2
4,339.9
-2%
1,035.2
1,019.0
1,162.0
1,123.6
Total supply
4,415.2
4,339.9
-2%
1,035.2
1,019.0
1,162.0
1,123.6
Gold (London PM fix, US$/oz)
1,669.0
1,411.2
-15%
1,631.8
1,414.8
1,326.3
1,276.2
OTC investment & stock flows
YoY%
Q3'13
Q4'13
*Provisional
Note: Gold prices are averaged over the period they refer to
Source: Thomson Reuters GFMS, LBMA, World Gold Council
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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6. India and China: engines of growth
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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7. Despite strong 2013, consumers keen for more
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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8. China insight
8

9. New market paradigm - Jewellery demand shifted
to East
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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10. New market paradigm – some key indicators
• Asia is getting richer
• Global GDP from 24% to 31% in last decade (Source: OW report : Asian Finance 2020)
• Growing middle class (Source: EY Middle Class growth in Emerging Market)
- China
o 2010 - 150 Mn
o 2020 - 500 Mn
- India
o
2010 - 50 Mn
o
2020 - 200 Mn
• Asia financial sector represents 37% of total world banking and insurance
market capitalisation (Source: OW report : Asian Finance 2020)
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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11. Benefited from growth in GDP and Western market crisis
Monthly average gold price (London PM fix, US$/oz)
Central bank stimulus
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Financial
crisis
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
Euro crisis
Source: LBMA, World Gold Council
GDP, US$tn
CAGR 2000-12
CAGR 2012-18F
25
20
10.4%
15
12.4%
10
8.3%
9.4%
5
2018F
2017F
2016F
2015F
2014F
2013F
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
Source: IMF WEO, World Gold Council
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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12. India insight
12

13. Time line of recent India gold regulations
17 Jan 2012
Import tax increased to 2%
16 Mar 2012
Import tax increased from
2% to 4%
21 Jan 2013
Import tax raised from 4% to
6%
13 May 2013
Restrictions placed on bank
imports via consignment
4 Jun 2013
Consignment restrictions
extended to agencies, with
imports on cash outright
basis
5 Jun 2013
Import tax raised from 6% to
8%
27 Jun 2013
Imports permitted only if
intended to meet needs of
jewellery consumers
22 Jul 2013
Restrictions on
consignments removed,
introduction of 80/20 policy
13 Aug 2013
Increase in import tax from
8% to 10%, excise tax raised
from 7% to 9%
14 Aug 2013
Response from authorities to
queries on 80/20 policy; with
some changes announced
31 Dec 2013
Refineries permitted to
import gold doré within 80/20
limits
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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14. Supply squeeze caused elevated premiums in India
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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15. Market dynamics – demand side
15

16. Total gold demand
Demand (tonnes)
2012
2013
1,896.1
2,209.5
17%
554.8
602.8
498.0
553.8
Technology
407.5
404.8
-1%
102.5
103.2
102.8
96.2
Investment
1,568.1
773.3
-51%
264.5
182.9
179.1
146.7
544.1
368.6
-32%
129.1
82.4
96.2
61.0
Gold demand
4,415.8
3,756.1
-15%
1,050.9
971.3
876.1
857.8
Gold demand (value, US$mn)
236,946
170,422
-28%
55,134
44,181
37,358
35,195
Jewellery
Central bank net purchases
YoY%
Q1'13
Q2'13
Q3'13
Q4'13
*Provisional
Note: Gold prices are averaged over the period they refer to
Source: Thomson Reuters GFMS, LBMA, World Gold Council
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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17. Record consumer demand offset by ETF outflows
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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18. Market dynamics – supply side
18

19. Recycled gold continues to decline, down 14% YoY in
2013
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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20. Conclusion
• 2013 saw record volumes of consumer demand – 3,864 tonnes.
• Sharp drop in prices generated an unprecedented reaction, initially in the East before
filtering out to western market.
• Growth in consumer demand offset ETF outflows.
• 2013 was the fourth consecutive year of net purchases by central banks.
• Technology demand was stable, underpinned by lower prices and improved consumer
sentiment.
• Supply contracted by 2% as a drop in recycling activity outweighed mine production growth.
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
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21. Thank you
World Gold Council
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United Kingdom
T +44 20 7826 4700
F +44 20 7826 4799
W www.gold.org

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