Gold -#China now #1 in demand- Turkey re-emerging as key market- World #Gold Council

World Gold Council numbers for Q1 and Aril 2012

We note that Turkey has continued to buy more gold, purchasing another 29 Tonnes in April 2012 ( reported this morning by the IMF).

 

CONCLUSION: Q1 global demand reached 1097.6 tonnes (worth $59.7B), down from last year and from previous quarter, due to declining demand from jewellery and technology sectors in reaction to higher prices. Increased demand for ETFs was not enough to offset the decline. Central Banks remained significant net buyers of gold.

 

1- Q1 demand 1097.6 tonnes, -5% yoy, but up in value (+16%) due to higher prices. The average gold prices was 22% above Q1/11.

2- China demand reached record level to 255.2 tonnes (+10% yoy), becoming the largest consumer market during the quarter. China dominated the jewellery market with demand of 156.6 tonnes (+8%).

3- Central banks net purchases reached 80.8 tonnes but lower than Q1/11 level (which saw an exceptional level as a results of Mexico 93 tonnes purchase). Buyers include: Russia, Mexico, Kazakhstan, Philippines,…

4- Turkey is re-emerging as an important gold market, for both exports and demand (page 4 to 11).

5- Investment demand was the only segment to be up yoy, reaching 389.3 tonnes (+13% yoy). In dollar terms, demand was up 38% yoy but down 13% from previous quarter. ETFs demand reached 51.4 tonnes, vs 62.1 tonnes net outflows in Q1/11.

6- Jewellery demand was down 6% yoy to 519.8 tonnes, however in dollar terms, demand was up 14% to a record $28.3B. India jewellery demand was down 19% yoy, but was up in value (in Ruppee). Although small, Russia's demand was up 28% to 20.4 tonnes.

7- Technology/other industrial demand was down 7%.

8- Total Gold supply was up 5% yoy to 1070.3 tonnes. Q1 mine production was up 3% yoy to 673.8 tonnes. Net hedging activity was almost halved yoy, from already a very low level.