Production remains relatively stable:
Gold demand for the second quarter of 2012 measured 990 tonnes, 7% below year-earlier levels. Weaker demand from the jewellery, investment and technology sectors was offset to some extent by a surge in buying by the official sector. The supply of gold declined 6% year-on-year, mainly due to lower levels of recycling. The gold price averaged US$1,609.49/oz during the quarter, 7% above the average Q2 2011 price; consequently there was only a marginal 1% year-on-year decline in the value of gold demand to US$51.2bn. Looking at the first half of 2012, gold demand of 2,090.8 tonnes was 5% down on the previous year and 14% above the five-year H1 average of 1,828.7 tonnes.
The second quarter of the year was a period of broad sideways consolidation for the international gold price, which spent much of the quarter locked within a US$100 range around US$1,600/oz. The lack of a clear price trend generated a mixed response among gold consumers, particularly in the investment arena. While some investors used this pause in the price to add to their investments, others chose to liquidate and realise profits on their holdings until a stronger price trend re-emerged. These two opposing actions were noticeable across all sectors of investment and the net impact on demand for ETFs and similar products was practically zero; outflows from ETFs during the second quarter were a marginal 0.8 tonnes.
Read the entire report from the World Gold Council.