– Global Gold Coin And Bar Demand Surged 28% To Record 1,654 Tonnes In 2013 (ZeroHedge, Feb 19, 2014):
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The World Gold Council’s global supply and demand figures have been released. They confirm what was already known – huge physical demand for coins and bars globally was counter acted by significant liquidations by COMEX speculators and weak hand ETF investors.
Gold Demand Trends Full Year 2013 makes interesting reading nevertheless. The World Gold Council said full-year 2013 gold demand was 3,756 tonnes, valued at $170 billion and down from 4,415 tonnes in the previous year due to ETF liquidations.
The data confirms that 2013 saw record demand for coins and bars globally but especially in China, Japan and much of Asia.
Annual global investment in bars and coins reached 1,654 tonnes, up from 1,289 tonnes in 2012, a rise of 28%, and the highest figure since the World Gold Council’s data series began in 1992. For the full year, Chinese and Indian investment in gold bars and coins was up 38% and 16%, respectively.
Although much smaller markets in terms of volume, in the U.S. bar and coin demand was up 26% to 68 tonnes, and in Turkey it was up 113% to 102 tonnes.
China became the world’s largest store of wealth buyer of gold in 2013. They are not consumers as only a tiny fraction of gold is ever consumed. Chinese people bought a record 1,066 metric tons of gold last year, as sudden price falls led to a 32% jump in bars, coins and jewelry buying.
China’s increased purchases helped limit the decline in gold prices as western speculators and investors sold 869.1 tons through exchange-traded products backed by bullion.
Chinese gold demand surged past Indian demand making China the world’s number one buyer of gold. However, India’s gold demand remained buoyant in 2013 and rose by 13% to 945 tonnes compared to 2012. The Indian demand number does not capture the full level of demand as the governments punitive import taxes led to a huge jump in black market activity and the smuggling of gold in huge quantities into India.
Gold demand in Japan jumped threefold in 2013 as people in Japan sought refuge from Prime Minister ShinzoAbe’s campaign to stoke inflation and weaken the yen. Demand for jewelry, bars and coins increased to 21.3 metric tons last year from 6.6 tons in 2012. Demand for jewelry rose 5.4% to 17.6 tons and Japan became a net buyer of bars and coins for the first time since 2005 with 3.7 tons of purchases. There is scope for a massive increase in Japanese investment, pension and store of wealth demand in the coming years.
Central banks added 61 tons to gold reserves in the fourth quarter, the least since the end of 2010, and full-year purchases declined 32% to 368.6 tons, according to the council. Nations added to holdings for 12 consecutive quarters and will continue purchasing amounts in the hundreds of tons which should support gold.
It is important to note that full-year 2013 total global gold demand of 3,756 tonnes is worth just $170 billion which is what the Federal Reserve prints in less than three months. It is much less than what the Fed, ECB, BOE, BOJ and PBOC and other central banks are printing every month.
Global gold coin and bar demand at 1,654 tonnes per annum is worth just $75 billion which is not far off what the Federal Reserve is printing each month now. This shows how while demand has increased in recent years, the demand is very sustainable and there remains room for a significant jump in demand in the coming years.