According to the latest Gold Market Trends 2014 report, released by WGC (www.gold.org), it appears that the gold market demand in 2014 was 3,923.7t, down 4% year-on-year. That should not come as a surprise, given the record high demand in 2013.
Consumer Choice Is Expanding
The striking West to East shift in gold demand of the past two years is now being reflected in a similar period of change in global gold market infrastructure. Innovators in Turkey, India, China and South East Asia are developing gold products, services and platforms across the entire supply chain to boost market development. Consumer choice is expanding and the supply chain is becoming more efficient and more transparent.
The standout trend of 2014 is the accumulation of physical gold by central banks who absorbed 477.2t of gold. Seeking continued diversification away from the US dollar, these institutions continued to bolster their holdings of gold.
This is a summary of gold demand statistics in 2014 per segment:
Jewellery Demand Down but Strong In India and The US
In general, jewellery demand was down compared to 2013. India, however, saw a strong demand, driven by their wedding-related festivals. 2014 was a standout year for Indian jewellery. Demand reached a record 662.1t, topping the previous year’bans total by 8%. This in spite of government measures designed to restrict gold imports being in place for much of the year.
US jewellery demand was again notable for its improving trend: Q4 was the seventh consecutive quarter of year-on-year growth and the strongest fourth quarter since 2009. Similarly, 2014 full year demand of 132.4t was the highest for five years. That being said, it clearly has to be acknowledged that the market remains far below pre-crisis levels of jewellery demand, which between 2000 and 2006 averaged 360t per year.
Central banks Continue Accumulating Gold
Central banks bought collectively 477.2t of gold in 2014. Driven by a need to diversify away from the US dollar, these institutions continued to bolster their holdings of gold.
Russia’s central bank was again the most prominent purchaser, adding 173t to its already sizable stocks. Russian holdings are now estimated at over 1,200t, which accounts for 12% of its overall reserves. Kazakhstan and Iraq bought 48t apiece during 2014; for Iraq, this equated to a trebling in the size of its gold reserves over the year.
Conversely, sales of gold by central banks were limited. Ukraine’s sale of almost 19t was by far the most sizable, but perhaps understandable in the context of events there during the year.
Read the full report from the WGC:
Gold Demand Trends 2014 by Gold Silver Worlds