world gold council: full year 2013 gold demand trends

Gold Demand TrendsFull year 201319th February 2014

Disclaimer

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Sources, copyright and disclaimer

© 2014 World Gold Council. Where expressly identified as such, the gold supply and demand statistics contained in this report were complied by Thomson Reuters GFMS. Thomson Reuters GFMS retains all rights in such statistics © 2014.

This presentation is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, gold, any gold related products or any other products, securities or investments. It does not, and should not be construed as acting to, sponsor, advocate, endorse or promote gold, any gold related products or any other products, securities or investments.

This presentation contains forward-looking statements. The use of the words “believes,” “expects,” “may,” or “suggests” or words of similar import, identifies a statement as “forward-looking.” The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on the analysis of the World Gold Council. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions all of which are difficult or impossible to predict accurately. In addition, the demand for gold and the international gold markets are subject to substantial risks which increase the uncertainty inherent in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the World Gold Council that the forward-looking statements will be achieved. We caution you not to place undue reliance on our forward-looking statements. Except in the normal course of our publication cycle, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and we assume no responsibility for updating any forward-looking statements. Past performance is no indication of future results.

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World Gold Council | Gold Demand Trends Full Year 2013 | February 2014


Agenda

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• Summary of full year 2013

• Summary of India and China

• Review of demand-Jewellery- Investment-Central Banks-Technology

• Review of supply

Introduction

4

Summary of the full year 2013Marcus Grubb

Summary of gold demand and supply

*ProvisionalNote: Gold prices are averaged over the period they refer to

Source: Thomson Reuters GFMS, LBMA, World Gold Council

5World Gold Council | Gold Demand Trends Full Year 2013 | February 2014

Tonnes 2012 2013 YoY% Q1'13 Q2'13 Q3'13 Q4'13

Gold demand 4,470.4 3,744.5 -16% 1,032.2 1,007.4 898.5 806.4

OTC investment & stock flows -55.2 595.4 - 3.0 11.6 263.5 317.2

Total demand (fabrication basis) 4,415.2 4,339.9 -2% 1,035.2 1,019.0 1,162.0 1,123.6

Total supply 4,415.2 4,339.9 -2% 1,035.2 1,019.0 1,162.0 1,123.6

Gold (London PM fix, US$/oz) 1,669.0 1,411.2 -15% 1,631.8 1,414.8 1,326.3 1,276.2


India and China: engines of growth

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Despite strong 2013, consumers keen for more

7

China insight

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New market paradigm - Jewellery demand shifted to East

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New market paradigm – some key indicators

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• 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)

-Chinao 2010 - 150 Mno 2020 - 500 Mn

- Indiao 2010 - 50 Mno 2020 - 200 Mn

• Asia financial sector represents 37% of total world banking and insurance market capitalisation (Source: OW report : Asian Finance 2020)


Benefited from growth in GDP and Western market crisis

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1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0200400600800

1,0001,2001,4001,6001,8002,000

Monthly average gold price (London PM fix, US$/oz)

Source: LBMA, World Gold Council

Financial crisis

Euro crisis

Central bank stimulus

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

F

2016

F

2018

F

0

5,000

10,000

15,000

20,000

25,000

GDP, US$tn

Source: IMF WEO, World Gold Council

12.4%

9.4%

10.4%

8.3%

CAGR 2000-12 CAGR 2012-18F

India insight

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Time line of recent India gold regulations

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17 Jan 2012Import tax increased to 2%

16 Mar 2012Import tax increased from 2% to

4%

21 Jan 2013Import tax raised from 4% to 6%

13 May 2013Restrictions placed on bank

imports via consignment

4 Jun 2013Consignment restrictions extended to agencies, with imports on cash

outright basis

5 Jun 2013Import tax raised from 6% to 8%

27 Jun 2013Imports permitted only if intended

to meet needs of jewellery consumers

22 Jul 2013Restrictions on consignments removed, introduction of 80/20

policy

13 Aug 2013Increase in import tax from 8% to 10%, excise tax raised from 7% to

9%

14 Aug 2013Response from authorities to

queries on 80/20 policy; with some changes announced


Supply squeeze caused elevated premiums in India

14

Market dynamics – demand side

15

Total gold demand

*ProvisionalNote: Gold prices are averaged over the period they refer to

Source: Thomson Reuters GFMS, LBMA, World Gold Council

16World Gold Council | Gold Demand Trends Full Year 2013 | February 2014

Demand (tonnes) 2012 2013 YoY% Q1'13 Q2'13 Q3'13 Q4'13

Jewellery 1,896.1 2,209.5 17% 554.8 602.8 498.0 553.8

Technology 407.5 404.8 -1% 102.5 103.2 102.8 96.2

Investment 1,568.1 773.3 -51% 264.5 182.9 179.1 146.7

Central bank net purchases 544.1 368.6 -32% 129.1 82.4 96.2 61.0

Gold demand 4,415.8 3,756.1 -15% 1,050.9 971.3 876.1 857.8

Gold demand (value, US$mn) 236,946 170,422 -28% 55,134 44,181 37,358 35,195


Record consumer demand offset by ETF outflows

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Market dynamics – supply side

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Recycled gold continues to decline, down 14% YoY in 2013

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Conclusion

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• 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 Council10 Old Bailey, London EC4M 7NGUnited Kingdom

T +44 20 7826 4700F +44 20 7826 4799W www.gold.org

Thank you

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world gold council: full year 2013 gold demand trends

Documents

gold supply

gold prices

disposition of gold

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summary of gold demand

gold related transaction

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forwardlooking statements