Recycled gold constituted nearly one-third of global supply

Author: Paul Ploumis
06 Mar 2015 Last updated at 07:21:44 GMT
NEW DELHI (Scrap Monster): The recent report compiled by the World Gold Council (WGC) and the Boston Consulting Group (BCG) indicates that recycled gold contributed nearly one-third of the global gold supply during the period from 1995 to 2014. The report titled ‘The Ups and Downs of Gold Recycling: Understanding Market Drivers and Industry Challenges’ further states that gold recycling dropped to seven-year low in 2014.

The report states that price fluctuations in gold accounted for 75% of the changes in recycling volumes over the years. The recovery in global economy has led to lesser ‘distress selling’ of gold. Moreover, gold prices have remained muted during 2014, which eventually led to low recycling volumes. The gold recycling had touched a peak in 2009, constituting 42% of the world supply. But volumes have declined steadily since then, mainly on account of softened gold prices and gradual recovery of world economies from the global financial crisis situation. The gold recycling volumes have slipped from 1,728 tonnes in 2009 to 1,122 tonnes in 2014.

According to the report, inability of India to feed gold supply chains through mining, presents immense opportunities for recycled gold. Presently, only 0.5% of the total gold stocks in the country are recycled. The recently announced gold sovereign bond scheme and gold monetization schemes may impact gold recycling in the country.

The contribution by Western countries to global recycling, especially from the US and Europe has witnessed significant growth from 27% in 2004 to 43% in 2011. The recycling of gold in industrial countries saw sharper decline when compared with developing countries. With gold consumption rising sharply in India and China, the competition for recycled gold may shift to east. Also, gold recycling is expected to continue its downtrend in 2015 as well, the report stated.