ETF Sales Sending Gold From West To East, Mine Production Will Limit Downside

May 29, 2013 3:15 PM ETGDX, GDXJ, GOEX, PSAU, NUGT, DUST, GGGG, RING2 Comments
Hard Assets Investor profile picture
Hard Assets Investor

By Sumit Roy

Marcus Grubb is the managing director of investment for the World Gold Council, where he leads both investment research and product innovation as well as marketing efforts surrounding gold's role as an asset class. Grubb has more than 20 years' experience in global banking, including expertise in stocks, swaps, and derivatives. After the release of the World Gold Council's quarterly Gold Demand Trends survey, Hard Assets Investor's Managing Editor Sumit Roy spoke with Grubb to get more details on the particulars of some of the report's more surprising conclusions.

Hard Assets Investor: How would you characterize gold demand in the first quarter?

Marcus Grubb: The first quarter saw a fall in demand by 13% to 963 metric tons. That's compared to Q1 2012, which is the ideal comparison because of the seasonality in the market. The real weakness was in ETFs, but if you look outside investment in the ETFs, pretty much everything else was either relatively flat or very strong. The first area of strength was jewelry; we had a rise of 12% in global jewelry demand. India was up 15% and China was up 19%. The other standout was the turn in U.S. jewelry demand. We had the first positive quarter for U.S. jewelry since September 2005. That's a reflection of the improvement in the U.S. economy that we have seen of late. Though it's a relatively below-par recovery, it's clearly visible in the jewelry stats.

On the other side, we did see weakness in investment demand. Investment demand was down 49%, and that was all due to the ETFs. We had outflows from global gold ETFs of 177 metric tons, which is the biggest on record for Q1. Three-quarters of the outflow in ETFs came from U.S.-listed ETF products. Elsewhere, bar and coin demand was actually up 10%, with strong bar and coin

This article was written by

Hard Assets Investor profile picture
4.12K Followers ( is a Van Eck Associates-sponsored, research oriented Web site devoted to sharing ideas about hard assets investing. The site has been developed as an educational resource for both individual and institutional investors interested in learning more about commodity equities, commodity futures and gold (the three major components of the hard assets marketplace). The site focuses on hard assets investing, without endorsing or recommending any particular investment product or approach. Visit: Hard Assets Investor (

Recommended For You

Comments (2)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.