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Global gold demand down 18pc: WGC

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GLOBAL gold demand has fallen 18 percent in the first three months of 2017 compared with the first quarter of 2016, the World Gold Council reported on Thursday.

In tonnage terms, demand in the period was down 228.3 tonnes, tumbling from 1 262.8 tonnes in the first quarter of last year to 1 034.5 tonnes in the corresponding period of this year.

This year’s inflows into exchange traded funds (ETFs) are a fraction of last year’s inflows, plummeting 68 percent to 109.1 tonnes – a drop of 233 tonnes compared with a high 342.1 tonnes.

In addition, central bank demand fell by 27 percent to 76.3 tonnes, nearly 28 tonnes less than in the first quarter of 2016.

World Gold Council market intelligence head Alistair Hewitt attributed gold’s year-on-year demand fall largely to last year’s exceptionally high tally.

“Although we didn’t see the record-breaking surges in ETF inflows experienced in the first quarter of 2016, we have seen good inflows nonetheless this quarter, with strong interest from European investors ahead of the Dutch and French elections,” Hewitt stated and also remarked on the strength of retail demand, noting that it was nine percent up at 290 tonnes and worth $11-billion-plus.

China led the way on the private investment front, with Chinese bar and coin demand surging 30 percent to 106 tonnes, fuelled by concerns over potential currency weakness and a frothy property market.

“Elsewhere the picture was less rosy; central bank demand was down and jewellery demand is still in the doldrums,” Hewitt said, adding that improvement signs were emanating from India in particular.

However, Indian jewellery demand remains 18 percent below the country’s five-year quarterly average, even though it consumed a 15 percent-higher 124 tonnes of gold jewellery. Technology demand rose by three percent to 78.5 tonnes, driven mainly by demand in the electricity industry, which rose four percent to 62.1 tonnes of gold. Demand from general industry rose one percent to 12.1 tonnes, but dentistry demand fell five percent to 4.3 tonnes.

The total supply of gold in the three months to March 30 was a 12 percent lower 1 032 tonnes, mainly on a 21 percent recycling fall to 283 tonnes.

The United States is still the largest single holder of official gold with 8 133 tonnes; Germany is second with 3 377 tonnes and the International Monetary Fund third with 2 814 tonnes.

South Africa is well down the list, in twenty-ninth position on the top forty list, with 125 tonnes, which represents 11 percent of this country’s total financial reserves, whereas gold holdings represent 75 percent of US reserves and 69 percent of German’s reserves. — Miningweekl

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