Contrary to popular beliefs, in 2012 the annual demand for gold from the technology sector declined by 5% to 428.2 tons. This is also a 5% contraction from the five year average of 453.1 tons. Though, in terms of value the tech demand had strong gains over 2011, according to the data provided by World Gold Council.
However, in 2012 the gold demand reached a new record of $23 billion. That is a solid 48% surge above the five year average of $15.5 billion.
Yet, there were some bright spots during the past year. The values kept their steady levels as there was a steady drop in tonnage along the same period.
Over the year, the demand for gold from the electronic sector has declined by 5% to 302.7 tons. At the same time value of demand was firm and rising insignificantly to $16.2 billion.
As always, the developments in the technology sector depended on the condition of the global economy. The European electronics market is the biggest drivers for the sector. Therefore, the persistent issues in the zone impacted on the demand.
The demand for gold was higher in the growing areas of tablet and smartphone production. Also industrial needs and automotive applications registered good performance, with greater use of gold in 2012. Yet, this positive demand was not enough to compensate for the decline of PCs. Last year the sales of computers have contracted seriously beyond any expectations.
Additionally the higher average cost of gold brought more losses in gold-bonding wire. Manufacturers went for less expensive alternatives such as copper and copper-coated palladium. This nailed the drop of the tonnage gold demand in the sector.
The last year was rather weak one for other industrial and decorative sectors. In this segments, the demand for gold edged down by 4% to 85 tons. Since the beginning of the century the tonnage in this sectors has kept is steady range. In terms of the five year average of 90.7 tons, the demand fell by 6%. This weak performance is mostly on the back of the lower demand from India in respect of the higher prices. The effect was so strong that it left behind the Italian and Chinese growth for yellow metal plated jewelry.
