Gold Recycling Numbers Continue to Decline

The World Gold Council, along with the Boston Consulting Group, published a report Thursday that reveals gold recycling numbers declined in 2014 and will likely remain low in 2015.

As quoted in the market news:

The report shows that between 1995 and 2014, recycled gold accounted for, on average, about a third of total supply . This average belies the dynamic, responsive nature of recycling. An analysis of recycling data from 1982 to 2012 reveals that price fluctuations accounted for around 75 percent of the changes in recycling volumes and that economic shocks can boost recycling by up to 20 percent.

The report examines the challenges and opportunities facing the gold recycling industry, which has two main components; high-value recycled gold and industrial recycled gold . The growing volume in waste electrical and electronic equipment (WEEE) offers opportunities for industrial materials recycling, although obtaining gold from this material will become ever harder as smaller amounts of gold are used in them. Furthermore, as Asia’s stock of gold keeps growing the ‘center of gravity’ for gold recycling will likely shift east. India’s and China’s gold jewellery consumption rose from 28 percent of the global total in 2004 to 60 percent in 2014 and as a consequence local competition for gold recycling business could heat up in Asia

Head of Market Intelligence at the World Gold Council, Alistair Hewitt, commented:

The decline in recycling in 2014 was widespread across both developing and industrial countries, although more severe in the latter. Looking forward, we expect recycling to remain low in 2015, and possibly decrease further given that a large portion of near-market supply has been flushed out in recent years. Reduced volumes of distress selling may further suppress recycling volumes and many recycling collectors are struggling to source stock. That said, recycling is the most dynamic element of supply and helps balance the gold market; any price increase in 2015 may elicit an increase in gold recycling volumes.

Click here to read the full World Gold Council report.