WGC: Rising Gold Prices Failed to Boost Recycled Gold Supply

SEATTLE (Scrap Monster): The Gold Demand Trends Report for the first quarterly period of 2018, published by the World Gold Council (WGC), states that recycled gold supply remained essentially unchanged despite higher gold prices. The mine production grew marginally during the quarter. Consequently, the global gold supply was up by 3% when compared with the corresponding quarter of 2017. The global gold supply totaled 1,063.5t in Q1 2018, as compared with 1,031.6t in Q1 ’17.

According to WGC report, the recycled gold sector recorded steady performance during Q1 2018. The supply from recycled gold during the quarter totaled 287.7t, virtually unchanged when matched with the supply of 287.3t during Q1 last year. This is despite higher gold prices that prevailed in many key gold markets. Generally, higher gold prices are likely to spur recycling activity.

The flat euro gold price resulted in 4% decline in recycling supply in Europe during Q1 this year. Further weakening of local gold prices in the UK led to significant decline in recycling volumes. Meantime, after several years of decline, the recycling volumes stabilized in the U.S, mainly on the back of improved performance by US dollar.

ALSO READ: WGC: Gold Demand in Q1 2018 Collapsed to Decade Low Level

Recycled gold supply witnessed marginal increase in the Middle East region. Most of the countries in the region, except Egypt, recorded rise in recycled gold volumes. Egypt recorded year-on-year decline in recycled gold volumes. Among Asian majors, India reported year-on-year decline in recycling activity. Recycling in China too was lower when compared with Q1 2017. Elsewhere in East Asia, recycling increased in tandem with rising gold prices, WGC Report noted.

The gold mine production by world countries has increased marginally by 1% to 770t in Q1 this year. Chinese output recorded 8% decline over the previous year. Other major producers including Peru, South Africa, the U.S. and Argentina too recorded notable declines during the quarter. On the other hand, output from Indonesia and Canada grew significantly.