Gold Supply & Demand Statistics for

2015/2016 - What is the message?

Cameron Alexander
Manager, Precious Metals Demand, Asia - GFMS

BMD Gold and Precious Metals Price Outlook Symposium 2015

Kuala Lumpur 15th June 2015

GFMS GOLD SURVEY 2015

Prepared by GFMS, Thomson Reuters

The GFMS team at Thomson Reuters gratefully acknowledges the generous

support from the following companies for this years GFMS Gold Survey and its
Quarterly Updates

www.pamp.com

Italpreziosi SPA

TANAKA PRECIOUS METALS

www.heraeus-preciousmetals.com

www.perthmint.com.au

www.igr.com.tr

WORLD GOLD SUPPLY AND DEMAND

tonnes

2009

2010

2011

2012

2013

2014

Total Supply

4,106

4,349

4,539

4,413

4,310

4,362

Physical Demand

3,038

3,807

4,515

4,321

5,041

4,158

Physical Surplus/Deficit

1,068

542

25

192

-732

204

623

382

185

279

-880

-160

39

54

-6

-10

-98

406

106

-154

-78

246

363

ETF Inventory Build

Exchange Inventory Build

Net Balance

Source: GFMS, Thomson Reuters

GOLD ETFS AND OTHER SIMILAR PRODUCTS

3000

Other
ETF Securities

2500

iShares Gold
SPDR Gold Shares
ZKB

1500

GBS (LSE listed)

1000
500
0
Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Source: GFMS, Thomson Reuters, collates from respective ETF issuers data

RETAIL INVESTMENT
Other
North America
Europe
China
India

700
600
500

Tonnes

Tonnes

2000

400
300
200
100
0
-100
Q1-10

Q1-11

Q1-12

Q1-13

Q1-14
Source: GFMS, Thomson Reuters

CHINA REMAINS
WORLDS LARGEST CONSUMER*
1600
1400

India

Tonnes

1200

China

1000
800
600
400
200
0
2005

2006

2007

2008

2009

2010

* Demand consists of jewellery fabrication, industrial

fabrication and retail investment

2011

2012

2013

2014

Source: GFMS, Thomson Reuters

INDIAN BULLION NET IMPORTS AND EXPORTS*

400

35

Net-Imports
Exports
Gold Price

350

30

Tonnes

25

250

20

200
15

150

10

100

50
0

Rupees/10g (thousands)

300

0
Q1
2010

Q1
2011

Q1
2012

Q1
2013

*Exports include bars, jewellery, medallions and coins

Q1
2014

Source: GFMS, Thomson Reuters

HONG KONG BULLION IMPORTS AND EXPORTS*

700

Imports
Exports

600

Tonnes

500
400
300
200
100
0
2010
Q1

2011
Q1

2012
Q1

2013
Q1

*Calculated quantities based on reported export and import values

2014
Q1

Source: GFMS, Thomson Reuters

CHINESE JEWELLERY FABRICATON

350

400

300

350

Gold Price

300

200
250
150

RNB/g

Tonnes

250

200

100

150

50
0

100
Q1
2010

Q1
2011

Q1
2012

Q1
2013

Q1
2014

SWISS GOLD BULLION TRADE 2014

Imports

Exports

1,660 tonnes

1,741 tonnes

cm2

One
is equal to 50 tonnes of gold and each countries flag is proportional to its trade. The whole rectangle
for imports and exports is equal to the total trade and the grey area denotes trade with a country not represented
by a flag.
Source: GFMS, Thomson Reuters; Swiss Impex

SWISS GOLD BULLION TRADE - MONTHLY

Source: GFMS, Thomson Reuters; Swiss Impex

SWITZERLAND ANNUAL TRADE SINCE 1982

Source: GFMS, Thomson Reuters; Swiss Impex

GLOBAL JEWELLERY FABRICATION

2005 VS. 2014
2005

2014

Source: GFMS, Thomson Reuters

HISTORICAL NET OFFICIAL SECTOR

PURCHASES & SALES
800
Net Purchases

400

-400
-800
Net Sales
-1200
-1600
1948

1958

1968

1978

1988

1998

2008

Source: BIS; IMF; GFMS, Thomson Reuters

FOUR LARGEST CUMULATIVE OFFICIAL

PURCHASERS IN 2014
200

Russia
Iraq
Azerbaijan
Kazakhstan

160

Tonnes

Tonnes

120

80

40

0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: GFMS, Thomson Reuters

WORLD SCRAP SUPPLY BY REGION

South America
Africa
Oceania
North America
Europe
Asia
Annual Average Gold Price

2000

Tonnes

1,500

1000

1,000

500

500

0
2004

2006

2008

2010

Constant 2014 US$/oz

1500

2,000

0
2012
2014
Source: GFMS, Thomson Reuters

MAPPING: MINE PRODUCTION WINNERS AND

LOSERS 2014 VERSUS 2013

Source: GFMS, Thomson Reuters

GLOBAL PROCESSED GOLD GRADE VS PRICE

2

2000

Processed
Ore Grade

Processed Ore Grade (g/t)

1500

1.6

1000

1.4

500

1.2
2005

Annual Average US$/oz

Gold Price
1.8

0 Source: GFMS, Thomson Reuters

2006

2007

2008

2009

2010

2011

2012

2013

2014

WORLD TOTAL CASH AND ALL IN COST CURVES

2014 VERSUS 2013
3000

3000
2013
2014
2013
2014

2500

All-in
All-in
Total
Total

Cost
Cost
Cash Cost
Cash Cost

2500
2000

1500

1500

2013 Average Gold Price ($1,411.22/oz)

2014 Average Gold Price ($1,266.40/oz)

1000

US$/oz

US$/oz

2000

1000

500

500

0
0

20

40

60

Cumulative Production %

80

0
100

Source: GFMS, Thomson Reuters

10

GLOBAL DELTA HEDGE BOOK VOLUME AT ENDDECEMBER 2014

Source: GFMS, Thomson Reuters

GLOBAL HEDGE BOOK HOLDERS*,

END-DECEMBER 2014

*Numbers on a nominal (number of contracts) basis

Source: GFMS, Thomson Reuters

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INDEX OF GOLD PRICE IN MAJOR CURRENCIES

400

Index, 2nd January 2007=100

350

Dollar
Euro
Rupee

300
250
200
150
100
50
Jan-07

Jan-09

Jan-11

Jan-13

Jan-15
Source: GFMS, Thomson Reuters

GOLD PRICE OUTLOOK FOR 2014-2015

Positives
A notable recovery in jewellery demand in developing countries.
Supply is contracting, led by scrap.
Anti-hedging sentiment appears to persist among producers and their investors.
Central banks remain considerable bullion buyers.
Market surplus is set to shrink considerably, to reduce investors burden to clear
the market.
Still uncertainty regarding the economic and fiscal situation in US and Europe,
any monetary tightening will be a gradual process.

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GOLD PRICE OUTLOOK FOR 2014-2015

Negatives
Gold faces increasing headwinds including: strong dollar, better economic outlook
and improving returns on traditional assets.
Still substantial investor gold holdings, scope for further long liquidation.
Falls below psychologically important levels will trigger panic selling. Bargain hunting
could ease if prices continue to trend down.
Physical demand (official bar investment in particular) in India restrained by
government policies.
Although underlying supply/demand fundamentals are likely to improve, a market
surplus will persist making the gold price still dependent on investor activity to mop
this up.

OTHER PRECIOUS METALS

Silver prices to average $16.50 in 2015 growth thereafter.
Stronger jewellery demand and weaker mine production providing a stronger
fundamental picture.
Platinum to move back into large deficit this year following small surplus in 2014.
Prices to retreat further before strong rebound.
Palladium prices to plateau this year before also increasing on stronger fundamentals.
Stronger industrial demand and substitution gains in the Autocatalyst sector.

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THANK YOU
cameron.alexander@thomsonreuters.com

Any
Questions?

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