Physical demand for gold was expected to support the market during the first half of 2014, the latest Gold Survey 2013 update by Thomson Reuters GFMS revealed last week.
Following the end of a 12-year bull run in 2013, the next year was set to be “the year of consolidation” for gold, with the price drivers continuing to adjust on the back of concerns over the health and stability of global financial systems.
Physical gold demand, however, for jewellery, bars, coins and industrial-use products was expected to support average prices above the $1 200/oz level during 2014.
“We are currently forecasting first-half 2014 physical bar demand to reach 560 t, up by almost 50 t, compared with the second half 2013 level, albeit on a significantly lower year-on-year basis,” the survey said.
However, the report pointed out that the surge in volume levels recorded after the sharp price corrections in the first half of 2013 would be difficult to sustain.
Emerging market demand led a 33% rise in world gold bar investment.
The US market witnessed a turbulent year during 2013 and Europe net bar investment fell by 7% year-on-year; however, India’s investment surged 29% to 266 t, only to be overtaken by China with a 47% jump, reaching a new record level of 366 t.