Supply and demand in the gold market rose 2 percent to 4,436 tonnes in 2011, metals consultancy Thomson Reuters GFMS said, as a rise in mine output to record levels and a leap in official sector purchases balanced a crash in implied net investment.
Below are key findings of the report, released on Tuesday:
* Gold mine supply climbed 3.8% last year to a record 2,812 tonnes, GFMS said.
* Global cash costs rose 14% to $628 an ounce in the first nine months of 2011, chiefly due to the appreciation of major producing countries' currencies versus the dollar. Rising gold prices also led to rising royalty and tax payments.
* The four biggest gold miners - Barrick Gold, Newmont Mining, AngloGold Ashanti and Gold Fields - all recorded lower production last year than in 2010. Kinross Gold had the biggest output rise in the top 10 in percentage terms, with production climbing 12%.
* Gold producers increased their hedge positions, which is gold sold forward to lock in prices, by a combined 18 tonnes in the first nine months of the year.
* Gold sales by central bank signatories to the Central Bank Gold Agreement, which caps annual sales at 400 tonnes, remained at extremely low levels.
* Gross central bank sales stood at 59 tonnes, with Libya as the largest seller and the Philippines and Germany making smaller disposals. On a net basis, however, the official sector was a major buyer of gold.
* Scrap supply softened, meanwhile, despite record high prices. A geographical exception was Europe, where it rose 12% in 2011 to a record high of 383.5 tonnes. Indian scrap supply fell nearly 30%.
* Jewellery demand eased 1.9% last year to 1,979 tonnes. The sharp rise in gold prices in the third quarter knocked previously buoyant demand from the sector.
* Gold fabrication in India, the world's biggest bullion market, eased by around 3% from the previous year's record levels, GFMS said. 2011 remained the second strongest year since 1968, it added.
* Chinese jewellery fabrication was strong, rising 16% to above 500 tonnes. Chinese jewellery offtake has more than doubled since 2005 due to rising income levels, urbanisation and recent inflationary fears, GFMS said.
* European fabrication fell 6%, with Italy, the continent's biggest jewellery exporter, posting an 18% drop in fabrication. U.S. gold jewellery demand fell by 10%, marking a decade of uninterrupted declines.
* Turkish bullion imports rose 88% to 80 tonnes, although GFMS estimates that jewellery offtake weakened by 19%. Physical investment in Turkey surged, GFMS said.
* Physical bar investment rose by nearly 36% in 2011 to 1,194 tonnes. Indian buying hit a record 282 tonnes last year, and buying was particularly strong in German-speaking Europe, lifted by the euro zone debt crisis, GFMS said.
* Implied net investment tumbled 92% in 2011 from the previous year, GFMS estimates, to 41 tonnes from 501 tonnes.
* Central banks are estimated to have bought 430 tonnes of gold last year, the highest level since 1964. Mexico was the biggest buyer, adding 100 tonnes to its reserves between February and April, while Russia was the second-largest purchaser with acquisitions of 87 tonnes by end-November.
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