Contributor Since 2010
Here's a quick look at the gold market in 2010 and how it may affect how much gold is worth.
2010 saw demand for gold bullion hit a 10-year high of 3812.2 tonnes. Year-on-year, this represented an increase of 9% and was slightly more than the previous peak set in 2008. What is remarkable is that even though price has soared 40% in the period 2008-2010, demand has not been heavily affected.
Investment demand remained largely unchanged, posting a 2% dip in demand since 2009. However, within the spectrum of investment vehicles, demand for actual physical bars increased by a massive 56% indicating investors are seeking to take actual physical possession of bullion.
At an individual country level, India was the strongest growth market in 2010 largely driven by the jewelry sector which saw demand rise to 746 tonnes. China on the other hand, was the strongest market for investment demand which saw a 70% increase year on year.
2010 saw a number of new mining projects come online during the year contributing to a modest increase of 3% in supply. 2010 also saw a significant change to previous years, in that central banks become modest buyers of gold after 21 years of net sales. Holdings in ETF's and similar products now stands at over 2000 tonnes.
Gold has been in a secular bull market since 2001 rising from less than $300 at the turn of the century to over $1400 in 2010 with more and more commentators expecting further price rises.
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