Demand For Gold In The World By Countries

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Traditionally, top demand for gold is held by East Asia, the Indian sub-continent and the Middle East which is accounted for 70% of world demand in 2008. And 55% of this demand is come from five countries as the biggest consumers - India, Italy, Turkey, USA and China. Each of them have their own unique market driven like a different set of socio-economic and cultural factors. But nowadays, Rapid changes in demographic and other socio-economic factors are also likely to produce new patterns of demand among countries in the world, as explained by research.gold.org.




Jewellery demand
Jewellery consistently accounts for over two-thirds of gold demand. In the 12 months to December 2008, this amounted to around US$61 billion, making jewellery one of the world's largest categories of consumer goods.

USA
In terms of retail value, the USA is the largest market for gold jewellery,

India

Indian gold demand is supported by cultural and religious traditions which are not directly linked to global economic trends. For more on the role of gold in India >> 
India come as the largest consumer in volume that accounting for 24% of demand in 2008. 

China
Strong growth in retail investment,

Turkey


Italy
Retail investment increase over year-earlier levels by 41 % to 61.4 tonnes as European investors in particular responded to heightened sovereign default
risk by turning to physical gold.

Thai
Net investment in gold reached  27,5 tonnes


It should be noted, however, that the economic crisis and the consequent recessionary pressures that developed over 2007 and 2008 had a significant negative impact on consumer spending and this, in turn, resulted in the reduced volume of jewellery sales, particularly in western markets.

Generally, jewellery demand is driven by a combination of affordability and desirability by consumers, and tends to rise during periods of price stability or gradually rising prices, and declines in periods of price volatility. A steadily rising price reinforces the inherent value of gold jewellery, which is an intrinsic part of its desirability. Jewellery consumption in the developing markets was, until fairly recently, expanding quite rapidly following a period of sustained decline, although recent economic distress may have stalled this growth. But several countries, including China, still offer clear and considerable potential for future growth in demand.

Because a significant portion of investment demand is transacted in the over-the-counter market, it is not easily measurable. However, there is no doubt that identifiable investment demand in gold has increased considerably in recent years. Since 2003 investment has represented the strongest source of growth in demand, with an increase in the last five years in value terms to the end of 2008 of around 412%. Investment attracted net inflows of approximately US$32bn in 2008.

There are a wide range of reasons and motivations for people and institutions seeking to invest in gold. And, clearly, a positive price outlook, underpinned by expectations that the growth in demand for the precious metal will continue to outstrip that of supply, provides a solid rationale for investment. Of the other key drivers of investment demand, one common thread can be identified: all are rooted in gold's abilities to insure against uncertainty and instability and protect against risk.
Gold investment can take many forms, and some investors may choose to combine two or more of these for flexibility. The distinction between buying physical gold and gaining exposure to movements in the gold price is not always clear, especially since it is possible to invest in bullion without actually taking physical delivery.

The growth in investment demand has been mirrored by corresponding developments in ways to invest and there are now a wide variety of investment products to suit both the private and institutional investor. More on how to invest 

Industrial demand

Industrial, medical and dental uses account for around 11% of gold demand (an annual average of over 440 tonnes from 2004 to 2008). Gold's high thermal and electrical conductivity, and its outstanding resistance to corrosion, explain why over half of all industrial demand arises from its use in electrical components. Gold's use in medical applications has a long history and today, various biomedical applications make use of its bio-compatibility, resistance to bacterial colonization and corrosion, and other attributes. Recent research has uncovered a number of new practical uses for gold, including its use as a catalyst in fuel cells, chemical processing and controlling pollution. The potential to use nanoparticles of gold in advanced electronics, glazing coatings, and cancer treatments are all exciting areas of scientific research.
For more on industrial and scientific applications of gold >>
For the latest on the industrial markets and growing uses for gold visit www.utilisegold.com. www.utilisegold.com

Supply

Mine production

Gold is produced from mines on every continent except Antarctica, where mining is forbidden. Operations range from the tiny to the enormous and there are several hundred operating gold mines worldwide (excluding mining at the very small-scale, artisanal and often ‘unofficial’ level). Today, the overall level of global mine production is relatively stable, averaging approximately 2,485 tonnes per year over the last five years. New mines that are being developed are serving to replace current production, rather than to cause any significant expansion in the global total.
The comparatively long lead times in gold production, with new mines often taking up to 10 years to come on stream, mean mining output is relatively inelastic and unable to react quickly to a change in price outlook. The incentives promised by a sustained price rally, as experienced by gold over the last seven years, are not therefore easily or rapidly translated into increased production.

Recycled gold (scrap)

Although gold mine production is relatively inelastic, recycled gold (or scrap) ensures there is a potential source of easily traded supply when needed, and this helps to stabilise the gold price. The value of gold means that it is economically viable to recover it from most of its uses; at least, that is, where it is in a form that is capable of being, if need be, extracted, then melted down, re-refined and reused. Between 2004 and 2008, recycled gold contributed an average 28% to annual supply flows.

Central banks

Central banks and supranational organisations (such as the International Monetary Fund) currently hold just under one-fifth of global above-ground stocks of gold as reserve assets (amounting to around 29,600 tonnes, dispersed across 110 organisations). On average, governments hold around 10% of their official reserves as gold, although the proportion varies country-by-country.
Although a number of central banks have increased their gold reserves in the past decade, the sector as a whole has typically been a net seller since 1989, contributing an average of 447 tonnes to annual supply flows between 2004 and 2008. Since 1999, the bulk of these sales have been regulated by the Central Bank Gold Agreement/CBGAs (which have stabilised sales from 15 of the world's biggest holders of gold). Significantly, gold sales from official sector sources have been diminishing in recent years. Net central bank sales amounted to just 246 tonnes in 2008.
For more on Central Bank gold holdings >>
For quarterly Reserve Asset statistics >>

Gold production

The process of producing gold can be divided into six main phases: finding the ore body; creating access to the ore body; removing the ore by mining or breaking the ore body; transporting the broken material from the mining face to the plants for treatment; processing; and refining. This basic process applies to both underground and surface operations.
The world's principal gold refineries are based near major mining centres, or at major precious metals processing centres worldwide. In terms of capacity, the largest is the Rand Refinery in Germiston, South Africa. In terms of output, the largest is the Johnson Matthey refinery in Salt Lake City, US.
Rather than buying the gold and then selling it onto the market later, the refiner typically takes a fee from the miner.
Once refined, the bullion bars (with a purity of 99.5% or higher) are sold to bullion dealers who, in turn, trade with jewellery or electronics manufacturers or investors. The role of the bullion market at the heart of the supply-demand cycle - instead of large bilateral contracts between miner and fabricator - facilitates the free flow of metal and underpins the free market mechanism.
The Gold Bars Worldwide website provides a wealth of additional information regarding the international gold bar market.
An audio/video file presenting an overview of some of the key issues covered above is now available


Source
Gold Demand Trends.