Key Points from the WGC’s Gold Demand Trends

From the press release that accompanied today’s release of the World Gold Council’s Gold Demand Trends for 2012 come the following highlights about gold demand in the fourth quarter and for all of 2012:

Whilst Indian full year demand was down 12% on the previous year, the market performed strongly in the final quarter with total demand at 261.9t, an increase of 41% on the same period last year.  Both jewellery and investment demand reached their highest levels for six quarters. Demand for jewellery was up 35% 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.

Chinese demand was flat year-on–year, reflecting the impact of economic slowdown. However looking at Q4, total demand was up 1% on the previous quarter to 202.5t. Jewellery demand was137.0t up 1% on Q4 2011 and investment demand was 65.5t, up 2% on the previous year. These increases may reflect the fact that the economic slowdown in China appears to have been shorter than expected.

Central bank buying for the full year rose by 17% compared to 2011, totalling 534.6t, the highest level since 1964. Central bank purchases stood at 145.0t in Q4, up 29% on the corresponding quarter in the previous year, making this the eighth consecutive quarter in which central banks have been net purchasers of gold.

Global investment in ETFs in 2012 was up significantly by 51% on the preceding year, though Q4 was down 16% to 88.1t when compared with the high levels recorded in Q3 2012.

On a related note, the World Gold Council has teamed up with UC Berkeley to offer a course for executives in central banks and finance ministries dubbed the Executive Programme in Gold Reserves Management.

It’s kind of odd that they’d do this at UC Berkeley (see here for the course description), where, it’s my understanding the view of the economics department is that the yellow metal really is a “barbarous relic”, despite all the central bank buying in recent years. Of course, Barry Eichengreen, author of Golden Fetters, is on the faculty there which makes  the location all the more curious.