April 13, 2011 / 12:20 PM / 7 years ago

FACTBOX-Gold and silver market trends for 2010-GFMS

LONDON, April 13 (Reuters) - Demand for gold bars grew strongly last year, helping lift overall physical investment despite weaker inflows into exchange-traded funds, metals consultancy GFMS said in its annual Gold Report on Wednesday.

Jewellery buying rebounded after a weak 2009, while overall mine supply rose. Below are key findings of the report.

SUPPLY

* Total gold supply edged up a touch to 4,334 tonnes last year from 4,318 tonnes a year before, lifted by a 100-tonne increase in mine supply. Scrap and official sector sales fell.

* In 2010, mined gold production edged up to 2,689 tonnes from 2,589 tonnes a year earlier, its third consecutive year of gains and its highest year of output since at least 1998.

* China was the world’s biggest gold miner last year, with 351 tonnes of production, followed by Australia, which mined 261 tonnes of gold.

* The United States was third, mining 234 tonnes, and Russia overtook South Africa as the number four miner with 203.4 tonnes. South African production fell 7.5 percent to 203.3 tonnes last year.

* Central banks turned net purchasers of gold last year, buying 73 tonnes. In the last decade’s peak sales year of 2005 they sold 663 tonnes of gold, and sold 34 tonnes in 2009.

* Gold scrap sales were at elevated levels, reaching 1,645 tonnes in 2010, though this was below 2009’s extremely high level of 1,695 tonnes.

* The United States was the single biggest seller of scrap gold back onto the market, with 143 tonnes of sales. China sold 138.2 tonnes of scrap gold, while Turkey sold back 122 tonnes.

DEMAND

* Inflows into gold-backed exchange-traded fund eased to 338 tonnes last year from 617 tonnes in 2009. This was more than outweighed by rising demand for coins and bars, however.

* Physical bar investment leapt by two-thirds to 880 tonnes in 2010 from the year before, by far the highest figure of the last 10 years and more than triple the figure recorded five years previously.

* Jewellery demand recovered in 2010 after the previous year’s slump, rising 11 percent, but sales were still the second lowest of the last decade at 2,017 tonnes.

* Jewellery consumption including scrap was highest in India last year at 657.2 tonnes, followed by China with 451.8 tonnes. Both increased their buying from the year before.

* Consumption in the United States eased to 128.6 tonnes from 150.3 tonnes, while in Turkey it dipped to 70.6 tonnes from 75.2 tonnes. Italian consumption fell to 34.9 tonnes from 41.4.

* Net producer de-hedging slipped to 103 tonnes from 236 tonnes in 2009, the lowest figure since 2005.

* Industrial and dental gold demand rose 13.7 percent last year to 466 tonnes.

Source: GFMS Gold Survey 2011

Reporting by Jan Harvey; editing by Jason Neely

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