Upload
ankit-varshney
View
219
Download
0
Embed Size (px)
Citation preview
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 1/48
Executive Chairman, GFMS Ltd.Executive Chairman, GFMS Ltd.
London, 13 London, 13 th th April 2011 April 2011
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 2/48
G ol d S u r v e y2 0 1 1
GF M S L i mi t e d
Gold Survey 2011
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 3/48
GFMS gratefully acknowledge the generousGFMS gratefully acknowledge the generous
year’syear’s Gold Survey Gold Survey and its twoand its two Updates Updates
Tanaka Precious Metalswww.pamp.com Paulson & Co. Inc. www.valcambi.com
Barr ick Gold Cor orat ionCommerzbank Global JPMor an Chase Bank . .
Precious Metals
ScotiaMocatta www.newmont.comwww.IBKCapital.com www.standardbank.com
Johnson Mattheywww.nyse.com/metals www.commodities.sgcib.comwww.ljgold.com
Kinross Gold Corporation www.randrefinery.com INTL Commodities, INC.www.intlfcstone.com
www.natexiscm.com
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 4/48
The GFMS Group’s Unique Research
Capabilities & Programme
Large and experienced team of 24 Analysts + Consultants.
Not just desk-based: Over 300 companies and organisations in41 countries visited by our personnel in the last 12 months.
Annual Gold, Silver, Platinum & Palladium and Copper Surveys.
Also, weekly, monthly, quarterly & bi-annual reports plusforecasts and a wide range of consultancy services across all
.
For more information visit: www.gfms.co.uk
or email: [email protected]
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 5/48
•• Gold PricesGold Prices•• SupplySupply
•• DemandDemand
•• OutlookOutlook
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 6/48
US Dollar Gold PriceUS Dollar Gold Price
DOLLARDOLLAR 20092009 20102010 Q1 2011Q1 2011
AverageAverage 972.35972.35 1,224.52 1,386.27
Intra-Year 24.4% 25.3% 3.6%
Year-on-Year 11.5% 25.9% 25.0%
US$/oz
2626--week moving averageweek moving average
Source: GFMS; ThomsonSource: GFMS; Thomson ReutersReuters
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 7/48
Euro Gold PriceEuro Gold Price
EUROEURO 20092009 20102010 Q1Q1 20112011
AverageAverage 700.19700.19 924.99924.99 1,012.321,012.32
IntraIntra--YearYear 22.3%22.3% 36.2%36.2% --3.7%3.7%
Euro/ozYearYear--onon--YearYear 18.0%18.0% 32.1%32.1% 26.2%26.2%
2626--week movin avera eweek movin avera e
Source: GFMS;Source: GFMS; ThomsonThomson ReutersReuters
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 8/48
Gold Prices in Different CurrenciesGold Prices in Different CurrenciesIndexed Daily SeriesIndexed Daily Series
Euro/kg US$/oz
Rupee 1 g g
Source: GFMS; ThomsonSource: GFMS; Thomson ReutersReuters
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 9/48
Gold and Other Assets & MetalsGold and Other Assets & Metals
Silver
Indexed Daily SeriesIndexed Daily Series
Gold
CRB
US 10-yr DJIA Bon
Source: GFMS; ThomsonSource: GFMS; Thomson ReutersReuters
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 10/48
Real and Nominal Gold PricesReal and Nominal Gold Prices
1980 average: $1,6261980 average: $1,626
’ ’ equals to over $2,248equals to over $2,248in real 2010 termsin real 2010 terms
RealReal
annual averagereached in 2010, but inreal terms today’s
PricePricepr ces are s e ow
historical peaks.
Nominal PriceNominal Price
Source: GFMS,Source: GFMS, Thomson ReutersThomson Reuters
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 11/48
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 12/48
GFMS’ Mine Su l DatabaseGFMS’ Mine Su l Database•• OverOver 100 companies analysed on a quarterly basis100 companies analysed on a quarterly basis – –
roduction costs cor orate activitroduction costs cor orate activit
•• Over 300 mines recorded on an annual basisOver 300 mines recorded on an annual basis – –
production/costs/reserves/gradeproduction/costs/reserves/grade•• Over 320 projectsOver 320 projects – – projected production profile, startprojected production profile, start--upup
date, capex, reserves, resourcesdate, capex, reserves, resources
•• -- --country basiscountry basis
••
•• BottomBottom--up cost analysis methodology to assess $/tonneup cost analysis methodology to assess $/tonne
mining, ore processing and onmining, ore processing and on--site administration costs,site administration costs,plus benchmarking of fuel, power, labour productivity andplus benchmarking of fuel, power, labour productivity andother key inputsother key inputs
,,
of industry cost structures and trends, benchmarkingof industry cost structures and trends, benchmarking
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 13/48
Gold Mine ProductionGold Mine Production
2010 up 99t2010 up 99t ororLatin America Other
Australia 3.8%3.8% yoyyoy
South Africa
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 14/48
Mine Production: Winners and LosersMine Production: Winners and Losers(Figures represent year-on-year change, i.e. 2010 less 2009)
Australia
BurkinaFaso
China
n eStates
South
AfricaSource:Source: GFMS (GFMS (Gold Survey 2011Gold Survey 2011))
Peru
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 15/48
Major Western World Mines' Cash CostsMajor Western World Mines' Cash Costs
n moneyn money--oo -- ee-- ay ermsay erms
South AfricaSouth Africa
AustraliaAustralia
NorthNorthAmericaAmerica
OtherOther
LatinLatin
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 16/48
YearYear--onon--Year Changes to Cash CostsYear Changes to Cash Costs
+15+15+10+10
+7+7
--22
--99
+24+24 --2525
478478 5575572010 vs 20092010 vs 2009
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 17/48
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 18/48
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 19/48
Supply from Scrap, Hedging & OfficialSupply from Scrap, Hedging & Official SalesSales
Hedging Supply
Net Official Sector SalesFlat trend since 2000?
Scrap
Secular increase in su l 1987Secular increase in su l 1987--9999
Source: GFMSSource: GFMS
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 20/48
Chan e in Su l from AboveChan e in Su l from Above--Ground StocksGround Stocks2010 compared to 2009
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 21/48
Regional Changes in Scrap SupplyRegional Changes in Scrap Supply
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2010) 2010)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 22/48
Jewellery Fabrication & Scrap SupplyJewellery Fabrication & Scrap Supply
Jewellery FabricationJewellery Fabrication
Scrap SupplyScrap Supply
Source:Source: GFMS (GFMS (Gold Survey 2011Gold Survey 2011))
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 23/48
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 24/48
CBGA and Other Gold SalesCBGA and Other Gold SalesIMF on-market sales
CBGA
“ ”“Other” refers to all other countries
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 25/48
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 26/48
World Gold FabricationWorld Gold Fabrication
Developing Countries
Industrialised Countriesupup oror
10.7%10.7% yoyyoy
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 27/48
Jewellery Fabrication: Winners and LosersJewellery Fabrication: Winners and Losers
gures represen year-on-year c ange, .e. ess
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 28/48
Fabrication Demand in 2010Fabrication Demand in 2010
Total fabrication demand rebounded by 10.7% to 2,779Total fabrication demand rebounded by 10.7% to 2,779
tonnes, led by a recovery in jewellery demand.tonnes, led by a recovery in jewellery demand.
,,
11%. Most of this increase was due to India. Excluding the11%. Most of this increase was due to India. Excluding the
, ., .
Other fabrication was 9% higher yoy in 2010. With all coinsOther fabrication was 9% higher yoy in 2010. With all coins
excluded, other fabrication’s rise was a more robust 14%.excluded, other fabrication’s rise was a more robust 14%.
•• Electronics demand accounted for the bulk of gains in nonElectronics demand accounted for the bulk of gains in non-- jewellery fabrication, with demand up by 19% to a new jewellery fabrication, with demand up by 19% to a newrecord high, thanks to an improving world economy.record high, thanks to an improving world economy.
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 29/48
•• GFMS enter all hedging transactions into our hedgingGFMS enter all hedging transactions into our hedging
database and thedatabase and the Brad Trinit Brad Trinit s stem.s stem.
•• Trades are input on a quarterly basis by company,Trades are input on a quarterly basis by company,
•• Using detailed market data, accurate deltas and otherUsing detailed market data, accurate deltas and other
..
•• Comprehensive global hedge book analysis is publishedComprehensive global hedge book analysis is published
,,
Générale.Générale.
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 30/48
Net Market Im act of Producer Hed inNet Market Im act of Producer Hed in
upp y
Demand
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 31/48
Total Accelerated Supply from Producer Hedging*Total Accelerated Supply from Producer Hedging*
Outstanding hedge book justOutstanding hedge book just
151 tonnes at end151 tonnes at end--20102010
* outstanding forward sales, loans and net delta hedge against positions
Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2011) 2011)
I i 2010I i 2010
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 32/48
Investment in 2010Investment in 2010
•• World Investment (which includes the implied figure, physicalWorld Investment (which includes the implied figure, physical
, ., .
approximate value terms, however, it rose to a new record of approximate value terms, however, it rose to a new record of
66 billion.66 billion.•• After a relatively quiet start to 2010, investment accelerated in After a relatively quiet start to 2010, investment accelerated in
the second quarter. Following a summer lull, renewedthe second quarter. Following a summer lull, renewed
interest drove the gold price to successive record nominalinterest drove the gold price to successive record nominalhighs in the final quarter of the year.highs in the final quarter of the year.
•• o s sa e aven appea was ooste y t e act t at ma oro s sa e aven appea was ooste y t e act t at ma or
currencies found themselves undermined by several factors,currencies found themselves undermined by several factors,
,, --
low interest rates and quantitative easing, most notably in thelow interest rates and quantitative easing, most notably in the
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 33/48
WorldWorld Investment*Investment*
Value of World
*World Investment is the sum of Implied Net (Dis)Investment, Bar Investment and all Coins & Medals.*World Investment is the sum of Implied Net (Dis)Investment, Bar Investment and all Coins & Medals.SourceSource: GFMS (: GFMS (Gold Survey Gold Survey 2011) 2011)
G ld E h T d d F dG ld E h T d d F d
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 34/48
Gold Exchange Traded FundsGold Exchange Traded Funds
338t increase in 2010.
Source: Respective issuers
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 35/48
Investors’ Positions in Gold FuturesInvestors’ Positions in Gold Futures-- --
Average size of netAverage size of net “investor”“investor” long.long.
Gold Price
20092009 219k contracts219k contracts
20102010 263k contracts263k contracts
2011.Q12011.Q1 225k contracts225k contracts
Non-commercial & non-reportable net positions in futures taken as proxy for investors’ positions.Source: CFTC
Ph i l B I t tPh i l B I t t
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 36/48
Physical Bar InvestmentPhysical Bar Investment
Source: GFMS (Gold Survey 2011)
R t il I t tR t il I t t
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 37/48
Retail InvestmentRetail Investment
Europe
North America
Source: GFMS (Gold Survey 2011)
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 38/48
Gold Supply 2009Gold Supply 2009 2011F2011F
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 39/48
Gold Supply 2009Gold Supply 2009--2011F2011F
Official Sector
•Scrap
• Mine Production
Source: GFMS
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 40/48
Su l in 2011Su l in 2011
Mine Production forecast to increase b a similarMine Production forecast to increase b a similaramount this year, 4%, with a number of largeamount this year, 4%, with a number of large
ro ect startro ect start--u s ex ected to contribute si nificantu s ex ected to contribute si nificantquantities of gold during the year.quantities of gold during the year.
,,
forecast to post a fair increase for the full year,forecast to post a fair increase for the full year,..
Overall supply growth in 2011 currently forecast atOverall supply growth in 2011 currently forecast atcompare wit just .4 in 1 .compare wit just .4 in 1 .
Gold Demand 2009Gold Demand 2009 2011F2011F
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 41/48
Gold Demand 2009Gold Demand 2009--2011F2011F
Official SectorProducer De-Hedging Other Fabrication
Jeweller
*World Investment is sum of Implied Net Investment, Physical Bar Investment and all Coins & Medals
Source: GFMS
D d i 2011D d i 2011
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 42/48
Demand in 2011Demand in 2011
•• Jewellery demand is likely to slip back this year due toJewellery demand is likely to slip back this year due to,,
very limited.very limited.
•• er a r ca on se o con nue grow ng s year, ueer a r ca on se o con nue grow ng s year, ueto gains in the electronics sector.to gains in the electronics sector.
•• Prospects for further deProspects for further de--hedging are limited by the nowhedging are limited by the nowvery low outstanding producer hedgebook.very low outstanding producer hedgebook.
•• Net official sector purchases are likely to rise strongly,Net official sector purchases are likely to rise strongly,
following the ending of the IMF gold sales programme.following the ending of the IMF gold sales programme.•• Investment demand for gold is expected to remainInvestment demand for gold is expected to remain
Investment in 2011?Investment in 2011?
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 43/48
Investment in 2011?Investment in 2011?Economic backdrop for investment will remain favourable in 2011:Economic backdrop for investment will remain favourable in 2011:
Any increase in interest rates (e.g. inAny increase in interest rates (e.g. in EurozoneEurozone) will be a slow and gradual) will be a slow and gradualprocess.process.
rates to turn positive for local savers or to impact severely GDP growth.rates to turn positive for local savers or to impact severely GDP growth.
Inflation expectations to grow, particularly in light of central banks’Inflation expectations to grow, particularly in light of central banks’reluctance to raise interest rates, loose fiscal policies and high commodityreluctance to raise interest rates, loose fiscal policies and high commodity
prices.prices.
On oin soverei n debt crisis in Euro e and its s readin eventuall to theOn oin soverei n debt crisis in Euro e and its s readin eventuall to theUnited States and Japan will further undermine faith in government paper.United States and Japan will further undermine faith in government paper.
Sustainability of investment demand an issue for the longer term:Sustainability of investment demand an issue for the longer term:
Investment’s share of overall gold demand is exceptionally high byInvestment’s share of overall gold demand is exceptionally high byhistorical standards.historical standards.
Increasin size of investors’ nearIncreasin size of investors’ near--market bullion stocks rovides otentialmarket bullion stocks rovides otential for major sellfor major sell--off if/when economic backdrop for investment turns negative.off if/when economic backdrop for investment turns negative.
W ld I t tW ld I t t* &* & F b i tiF b i ti ( l di ll i )( l di ll i )
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 44/48
World InvestmentWorld Investment* &* & FabricationFabrication (excluding all coins)(excluding all coins)
((19801980--2011F)2011F)
FabricationFabrication
*World Investment*World Investment is theis the the sum of implied investment, bar hoarding and allthe sum of implied investment, bar hoarding and all coins & medalscoins & medalsSource:Source: GFMSGFMS
Price OutlookPrice Outlook
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 45/48
Price OutlookPrice Outlook• Investors will remain the principal driver of prices this year, with abreach of $1,600 in the second half still a strong possibility.
• In the short term, prices could retrace from current levels; the high$1,300s are a possible low over the next three months, with prices in that
re ion most likel to be ver well su orted b bar ain huntin and stockreplenishment.
• Supply expected to rise fairly strongly this year, with continued growth in- -.
but should recover in the latter part of 2011 basis higher price conditions.• Fabrication demand likely to fall somewhat but losses to be limited bysurges n ewe ery re ate uy ng on pr ce ps an un er y ng growt nelectronics fabrication.
• Market imbalances su est that at some oint the old rice will have to retreat. Nevertheless, this is most unlikely to occur on a secular basis in2011and potentially not until well into 2012, especially if current economicconditions, which still favour gold investment, are largely maintained.
GFMS Gold Price Forecast for 2011GFMS Gold Price Forecast for 2011
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 46/48
GFMS Gold Price Forecast for 2011GFMS Gold Price Forecast for 2011
Average 04/01/10 to 11/04/10: $1,111
Average 04/01/11 to 11/04/11: $1,393
Full Year 2011 Average Forecast: $1,455
Full Year 2011 Range: $1,319-$1,620
Source:Source: GFMSGFMS
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 47/48
obtained from sources believed to be reliable, but no representation,guarantee, condition or warranty, express or implied, is made that such
information is accurate or com lete and it should not be relied u on as such. Accordingly, GFMS Ltd accepts no liability whatsoever to the people ororganisations attending this presentation, or to any third party, in connectionwith the information contained in, or an o inion set out or inferred or im liedin, this presentation. This presentation does not purport to make any
recommendation or provide investment advice to the effect that any goldrelated transaction is appropriate for all investment objectives, financialsituations or particular needs. Prior to making any investment decisionsinvestors should seek advice from their advisers on whether any part of thispresentation is appropriate to their specific circumstances. This presentationis not, and should not be construed as, an offer or solicitation to buy or sellgold or any gold related products. Expressions of opinion are those of GFMSLtd only and are subject to change without notice.
8/7/2019 Gold Survey 2011 Presentation London
http://slidepdf.com/reader/full/gold-survey-2011-presentation-london 48/48