3. Agenda
• Summary of full year 2013
• Summary of India and China
• Review of demand
- Jewellery
- Investment
- Central Banks
- Technology
• Review of supply
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
3
9. New market paradigm - Jewellery demand shifted
to East
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
9
10. New market paradigm – some key indicators
• Asia is getting richer
• Global GDP from 24% to 31% in last decade (Source: OW report : Asian Finance 2020)
• Growing middle class (Source: EY Middle Class growth in Emerging Market)
- China
o 2010 - 150 Mn
o 2020 - 500 Mn
- India
o
2010 - 50 Mn
o
2020 - 200 Mn
• Asia financial sector represents 37% of total world banking and insurance
market capitalisation (Source: OW report : Asian Finance 2020)
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
10
11. Benefited from growth in GDP and Western market crisis
Monthly average gold price (London PM fix, US$/oz)
Central bank stimulus
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Financial
crisis
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
Euro crisis
Source: LBMA, World Gold Council
GDP, US$tn
CAGR 2000-12
CAGR 2012-18F
25
20
10.4%
15
12.4%
10
8.3%
9.4%
5
2018F
2017F
2016F
2015F
2014F
2013F
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
Source: IMF WEO, World Gold Council
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
11
13. Time line of recent India gold regulations
17 Jan 2012
Import tax increased to 2%
16 Mar 2012
Import tax increased from
2% to 4%
21 Jan 2013
Import tax raised from 4% to
6%
13 May 2013
Restrictions placed on bank
imports via consignment
4 Jun 2013
Consignment restrictions
extended to agencies, with
imports on cash outright
basis
5 Jun 2013
Import tax raised from 6% to
8%
27 Jun 2013
Imports permitted only if
intended to meet needs of
jewellery consumers
22 Jul 2013
Restrictions on
consignments removed,
introduction of 80/20 policy
13 Aug 2013
Increase in import tax from
8% to 10%, excise tax raised
from 7% to 9%
14 Aug 2013
Response from authorities to
queries on 80/20 policy; with
some changes announced
31 Dec 2013
Refineries permitted to
import gold doré within 80/20
limits
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
13
14. Supply squeeze caused elevated premiums in India
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
14
19. Recycled gold continues to decline, down 14% YoY in
2013
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
19
20. Conclusion
• 2013 saw record volumes of consumer demand – 3,864 tonnes.
• Sharp drop in prices generated an unprecedented reaction, initially in the East before
filtering out to western market.
• Growth in consumer demand offset ETF outflows.
• 2013 was the fourth consecutive year of net purchases by central banks.
• Technology demand was stable, underpinned by lower prices and improved consumer
sentiment.
• Supply contracted by 2% as a drop in recycling activity outweighed mine production growth.
World Gold Council | Gold Demand Trends Full Year 2013 | February 2014
20
21. Thank you
World Gold Council
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United Kingdom
T +44 20 7826 4700
F +44 20 7826 4799
W www.gold.org
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