In value terms, gold demand in 2012 was $236.4 billion, an all-time high, the World Gold Council reported in its Q4 and full year 2012 Gold Demand Trends report.
Gold demand in value terms for the final quarter of the year was 6 percent higher year-on-year at $66.2 billion, marking the highest ever Q4 total.
Global gold demand in Q4 2012 was 1,195.9 tons, up 4 percent on the same quarter in 2011. In Q4 2012, the average gold price reached a record level of $1,721.8/oz, up 1 percent on the previous record average price in Q3 2011. The average price during 2012 was $1,669.0/oz, up 6 percent from $1,571.5/oz in 2011,
The report showed that while Indian full year demand was down 12 percent on the previous year, the market performed strongly in the final quarter with total demand at 261.9t, an increase of 41 percent on the same period last year. Both jewelry and investment demand reached their highest levels for six quarters. Demand for jewelry was up 35 percent year-on-year to reach 153.0t, and strong retail demand led to 108.9t of investment buying. In India the prospect of duty increases, which came in to force in January 2013, may have added to strong buying in the final quarter to beat the anticipated price rises.
Besides, Chinese demand was flat year-on-year, reflecting the impact of economic slowdown. However looking at Q4, total demand was up 1 percent on the previous quarter to 202.5t. Jewelry demand was137.0t up 1 percent on Q4 2011 and investment demand was 65.5t, up 2 percent on the previous year. These increases may reflect the fact that the economic slowdown in China appears to have been shorter than expected.
Meanwhile, central bank buying for the full year rose by 17 percent compared to 2011, totaling 534.6t, the highest level since 1964. Central bank purchases stood at 145.0t in Q4, up 29 percent on the corresponding quarter in the previous year, making this the eighth consecutive quarter in which central banks have been net purchasers of gold.
Moreover, global investment in ETFs in 2012 was up significantly by 51 percent on the preceding year, though Q4 was down 16 percent to 88.1t when compared with the high levels recorded in Q3 2012.
Marcus Grubb, Managing Director, Investment at the World Gold Council, said: "China and India remain the world's gold power houses, and by some distance, despite challenging domestic economic conditions. In India, consumer sentiment towards gold remained strong despite measures aimed at curbing demand, reaffirming gold's role in Indian society. In an underdeveloped financial system in India, gold has an important role to play."
"Notwithstanding the predicted economic slowdown in China, investment demand was up 24 percent in Q4 on the previous quarter and jewelry consumption held steady at 137.0t," he added.
"Central banks' move from net sellers of gold, to net buyers that we have seen in recent years, has continued apace. The official sector purchases across the world are now at their highest level for almost half a century."
"Despite the turbulent macroeconomic climate throughout the year, as well as the regional uncertainties affecting India and China, the two largest gold markets, annual demand was 30 percent higher than the average for the past decade."
The report noted that fourth quarter gold demand of 1,195.9t was up 4 percent compared with Q4 2011 but down 4 percent on the full year.
The value measure of gold demand in Q4 2012 was 6 percent higher year-on-year at $66.2 billion and 2 percent up over the full year at a record $236.4 billion.
The Q4 2012 average gold price reached a record level of $1,721.8/oz, up 1 percent on the previous record average price in Q3 2011.
Investment demand (the sum of ETFs and total bar and coin demand) was 424.7t, down 8 percent compared to the same quarter last year, but was 19 percent above the five-year quarterly average.
Demand for ETFs and similar products in Q4 was down by 16 percent on the corresponding quarter in 2011 to 88.1t, but was up by 51 percent on the full year.
Demand in the jewelry sector was up 11 percent to 525.3t compared to 472.4t in the same quarter in 2011. Jewelry demand for the full year 2012 was down 3 percent on 2011 in tonnage terms.
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