Gold Outlook Positive for 2011 as Diverse Markets and Strong Fundamentals Drive Demand
remains robust throughout 2011 against a background of another strong
quarter, the geographic and sectoral diversity of demand and strong
fundamentals, the World Gold Council said today. According to the Gold Demand
Trends report for Q1 2011, demand for gold in the rest of 2011 will be driven
by a number of key factors:
– Prevailing global socio-economic conditions will continue to drive
investment demand for gold. These include: continued uncertainty over the US
economy and the dollar, ongoing European sovereign debt concerns, global
inflationary pressures and continued tensions in the
– Sustained momentum in Chinese and Indian jewellery demand will underpin
growth in the jewellery sector throughout 2011. Strong demand in
the recent Akshaya Tritiya festival and the beginning of the wedding season,
alongside extensive purchasing on dips in the gold price, underlines the
strength of the Indian market.
– Net purchasing by the official sector is expected to continue in 2011
as central banks turn to gold as a means of diversifying their reserves into
an asset with no credit or counterparty risk.
“The resilience of gold during recent volatility in the commodities
market exemplifies the strength of the global gold market and its unique
demand drivers. High levels of investment demand across the world, strong
together with central bank purchasing demonstrates gold’s diverse demand
drivers. We anticipate continued strong demand during the rest of 2011.”
“Chinese appetite for gold has increased rapidly over the past few years.
2020, however, we believe that this doubling may in fact be achieved
sooner. Increasing prosperity in the world’s most populous country coupled
with their high affinity for gold will serve to drive demand in the
long-term. Near term inflationary expectations are likely to support the
investment case for gold.”
Gold Demand Statistics for Q1 2011
– Global gold demand in the first quarter of 2011 totalled 981.3 tonnes,
up 11% year-on-year from 881.0 tonnes in the first quarter of 2010. In value
terms, this translated to
quarter of 2010, an increase of almost 40%. This was largely attributable to
a widespread rise in demand for bars and coins, supported by an improvement
in jewellery demand in key markets.
– The quarterly average gold price hit a new record of
(London PM Fix), its eighth consecutive year-on-year increase. Despite a
period of price consolidation in the early part of the quarter, it climbed to
record highs throughout March and has continued to achieve new highs in April
– During the first quarter of the year, investment demand grew by 26% to
310.5 tonnes from 245.6 tonnes in the first quarter of 2010. In value terms,
investment demand was
demand which increased by 52% year-on-year, to 366.4 tonnes. In value terms,
this represented a near-doubling of demand to
– ETFs and similar products witnessed net outflows of 56 tonnes (
Redemptions were concentrated in January. Despite the outflows, the
collective volume of gold held by global ETFs by the end of the quarter was
in excess of 2,100 tonnes equating to more than
– Jewellery demand in the first quarter of 2011 registered a gain of 7%
from year earlier levels of 521.3 tonnes to reach 556.9 tonnes. This equated
to a record quarterly value of
markets for gold jewellery, together accounted for 349.1 tonnes or 63% of the
total, a value of
record of 142.9 tonnes (
– Technology demand remained steady in the first quarter at 113.8 tonnes
the highest year on record for gold demand in electronics at 326.8 tonnes or
– In Q1 2011, gold supply declined by 4% year-on-year to 872.2 tonnes
from 912.1 tonnes in the first quarter of 2010. This decline was due to a
sharp increase in net purchasing by the official sector and a fall in the
supply of recycled gold, which was down 6% on year-earlier levels to 347.5
tonnes from 369.3 tonnes in the first quarter of 2010. Mine production
increased by 44 tonnes year-on-year, a growth rate of 7% from year earlier
levels, with negligible net producer de-hedging.
– Central bank purchases jumped to 129 tonnes in the quarter, exceeding
the combined total of net purchases during the first three quarters of 2010.
The Q1 2011 Gold Demand Trends report, which includes comprehensive data,
can be viewed at: http://www.gold.org/media/.
Note to editors:
World Gold Council
The World Gold Council is the market development organisation for the
gold industry. Working within the investment, jewellery and technology
sectors, as well as engaging in government affairs, our purpose is to provide
industry leadership, whilst stimulating and sustaining demand for gold.
We develop gold-backed solutions, services and markets, based on true
market insight. As a result, we create structural shifts in demand for gold
across key market sectors.
We provide insights into the international gold markets, helping people
to better understand the wealth preservation qualities of gold and its role
in meeting the social and environmental needs of society.
Based in the UK, with operations in
the world’s leading and most forward thinking gold mining companies. For
further information visit http://www.gold.org.
---------------------------------  See China Gold Report: Gold in the Year of the Tiger, March 2010 For further information please contact: Stephanie Mackrell Quintin Keanie World Gold Council Capital MSL T +44(0)20-7826-4763 T +44(0)20-7255-5154 E firstname.lastname@example.org E Quintin.email@example.com
SOURCE World Gold Council