Global gold demand down in Q2

According to the World Gold Council, a non-profit association of the world's leading gold mining companies,  the global gold demand, for gold for the period April-June of 964 tons, worth $40 billion, compared with 1148 tons worth $48 billion in the second quarter of last year. In value terms, gold demand in the second quarter of 2014 was $40 billion, down 24 percent compared to Q2 2013. The average gold price of $1,288/oz was down 9 percent on the average the second quarter of 2013 price. Consumers bought less gold in the quarter, global jewellery demand, which represents more than half of total global demand, was unsurprisingly down 30% year-on-year to 510 tons from 727 tons. Particularly, India and China, becoming the world’s biggest gold market, remain significant drivers of the global jewellery market, purchasing 154 tons and 143 tons respectively.  The council said that Indian jewellery buying was also affected by high value purchases being restricted in the run up to the election and the continued impact of import restrictions on gold. However, there were continued signs of recovery in some Western markets as jewellery demand in the US rose by 15 percent to 26 tons and the UK rose 21 percent to 4 tons as consumer confidence continued to grow in line with the economy and yellow gold came back into fashion.  

Annual global investment in bars and coins was 235 tons, a rise of 4 percent and the net central banks purchases totaled 118 tons, an increase of 28 percent year on year.

"In the context of an exceptional year last year where we saw record consumer buying and investor sell-offs, this quarter’s demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the gold market," said Marcus Grubb, managing director of investment strategy at the World Gold Council. 

"Jewellery consumers continued to digest the exceptional purchases of 2013 and investors also rebalanced, pulling back from the extremes we saw last year.

“Overall the gold market is stabilising following the extraordinary conditions we saw in 2013,” Grubb said.

The council also said that total supply increased by 10 percent in the quarter to 1,078 tons. "We expect supply to peak in 2014 and plateau over the next 4-6 quarters," said in a statement by the council. 

Separately, Turkey' total gold imports  in the first seven months of the year were 50.95 tons, a 77 percent decline from the same period last year.