• 2005 demand for gold hits record of $53.7 billion
  
• 26% rise in investment demand in tonnage terms in 2005
  
• Jewellery demand 14% higher in $ terms than 2004 despite the impact of a volatile price in Q4
  
• Net inflows into Exchange Traded Funds totalled 203 tonnes or $3 billion

Consumers and investors pushed demand for gold to a record level of $53.6 billion in 2005, according to figures published today by the World Gold Council (WGC), with all categories of demand (jewellery, industrial and investment) recording double-digit year-on-year growth in dollar terms.

Identifiable investment demand totalled 600 tonnes in 2005, a 26% rise on the previous year, whilst jewellery demand rose 5% (2,736 tonnes) and industrial demand by 2% (419 tonnes). It was also a record year in dollar terms for total consumer demand (3,132 tonnes) which includes both retail investment and jewellery.

Full details are given in the press release.

Data on the supply and demand for gold are compiled by GFMS Ltd. The company provides a number of tables exclusively for the World Gold Council. The following table shows a summary of gold demand. Links to more detailed tables, and to notes and copyright information, are given below. Please note the restrictions on disseminating these data.

Notes to tables.
Notes: Source: GFMS Ltd. 1. Identifiable end-use consumption excluding central banks. 2. Provisional. 3. "Other retail" excludes bar and primary coin offtake; it represents mainly activity in North America and Western Europe. 4. Exchange Traded Funds and similar products including LyxOR Gold Bullion Securities, Gold Bullion Securities (Australia), streetTRACKS Gold Shares, NewGold Gold Debentures, iShares Comex Gold Trust, Central Fund of Canada and Central Gold Trust.

Most countries report their official gold holdings along with other reserve statistics on a monthly basis to the International Monetary Fund (IMF). World Gold Council data are based on these supplemented by information from national sources. These will not always correspond exactly with the estimates published by GFMS, which include estimates of unreported and quasi-official holdings.

Coins and small bars Exchange traded gold Gold accounts Gold certificates Gold oriented funds Structured products

Overview

There are a number of ways of buying gold for investment purposes. Jewellery is not dealt with in this section, although in many countries it is purchased with the dual purposes of adornment and saving. The distinction between the purchase of physical gold and gaining an exposure to movements in the gold price is not always clear, especially since physical gold can be purchased in some forms without the owner needing to take delivery. If you are thinking about investing gold, it is worth giving the same consideration to your purchase as you would to any other investment. The following list of questions is provided as a guide to help you decide on the channel or channels that would be most appropriate for you. Why have you decided to buy gold? Do you want a real asset that you can have available at all times or do you simply want exposure to the gold price because you believe it is likely to rise? Will you want to have the gold delivered to you or would you prefer to have it stored in a vault? What costs are involved? These may include taxes, commissions, premiums, storage or insurance. Is the counterparty (the person or company from or through whom you will be making the purchase) reliable and trustworthy? How does gold fit in with any other investments you may have? For more information on the role gold can play as a portfolio diversifier

Safe haven

Completely free of credit risk, although it bears a market risk, gold has always been a secure refuge in unsettled times. Its ‘safe haven’ attributes attract wise investors.

Managing wealth

Gold has proved itself to be an effective way to manage wealth. For at least 200 years the price of gold has kept pace with inflation.

In 1999, Alan Greenspan, then Chairman of the Federal Reserve Board of the United States of America, said: "Gold still represents the ultimate form of payment in the world."

Effective performance

Another important reason to invest in gold is its consistent delivery within a portfolio of assets. Its performance tends to move independently of other investments and of key economic indicators. Even a small weighting of gold in an investment portfolio can help reduce overall risk.