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India’s total gold demand in the calendar 2013 is expected to be higher, albeit slightly compared to 2012, according to the assessment of the World Gold Council (WGC) which today presented its gold demand trend report for the quarter ending september 2013.
However, the strength of Indian demand in the first half of the year means that full year consumer demand is still on track to narrowly exceed the 2012 total of 864 tons. However, how will this be met could be an issue as in the September quarter out of total demand of 148 tons 61 tons was by way of recycled gold which means selling of old jewellery and investments.
The council noted that, “Gold entering the country unofficially through India’s porous borders helped to meet pent-up demand, together with an influx of recycled gold that was drawn out by higher prices and promotions offered by retailers. Heading into the fourth quarter, and the major Hindu festive season, latent demand among Indian consumers remains very strong, as reflected in the persistence of local price premiums above the international gold price.
It is likely that unofficial gold will continue to find its way into the country to satisfy demand.”
Globally gold demand for gold in Q3 2013 (September end quarter) was 869 tons, down 21% on the same period a year ago. gold-backed exchange traded funds (ETFs, which had net outflows of 119 tons this quarter, compared to net outflow of 402 tonnes tons in Q2 (ending June) 2013, according to the WGC. In June quarter gold prices plummeted twice on sale off by investors and prices have seen levels below $1200 per ounce in June which was above $1500 when in early days of April 2013. While the fall in investment demand by FTFs contributed the most in over all fall in gold demand during the quarter, jewellery demand globally went up by 5% to 486.7 tons. Those that contributed to jewellery demand include Hong Kong where demand was up 28%, Vietnam up 14%, Thailand up 57% and Indonesia up 19% on the same quarter last year albeit off low bases. Similarly, demand in the Middle East is up 9% for Q3 against last year and the US was up by 14%. However for India US is the biggest market where the jewellery demand increased by 14%.
Apart from the jewellery, globally central banks were buying gold consecutively for 11 th quarter however that has seen a slower growth this quarter. Net central bank purchases totalled 93 tons, 17% down on Q3 2012.
