5 Highlights of the World Gold Council’s Q1 Demand Trends Report

The World Gold Council’s (WGC) Gold Demand Trends report for Q1 2018 has been released, and it shows global gold demand fell 7 percent year-on-year to come in at 973.5 tonnes.

With demand at its lowest for Q1 since 2008, the report states that the decline was due to “a fall in investment demand for gold bars and gold-backed ETFs, partly due to range-bound gold prices.”

Overall, ETF inflows were down, bar and coin investment tumbled and jewelry demand was flat; meanwhile, central banks did more buying, reaching levels not seen since 2014. Read on to learn more about what the WGC says in the report.

1. ETF inflows were down year-on-year

ETF inflows fell 66 percent year-on-year, sitting at 32.4 tonnes versus the 96 tonnes seen in Q1 2017.

“The environment during the first three months of 2018 was more varied: a relatively stable gold price and rising interest rates contrasted with sharp equity market volatility and periods of heightened geopolitical risk to create mixed signals for gold investors,” the WGC states.

The group also notes that North America-listed ETFs saw their strongest quarterly inflows since Q2 2016, while investment in Europe was flat and holdings in gold-backed ETFs in the Asian region fell by 3.6 tonnes because of outflows from China.

2. Investment in gold bars and coins was down

Global bar and coin demand declined 15 percent year-on-year to come in at 254.9 tonnes.

“Q1 2017 was relatively strong, as investors responded to heightened political uncertainty and fears of currency weakness. Such concerns have since faded and, coupled with a range-bound gold price across most major markets, the year started with relatively subdued bar and coin demand,” says the WGC.

Chinese investors largely pushed the decline as demand for gold bars and coins fell 26 percent year-on-year and came in at 78 tonnes during the quarter.

India’s bar and coin demand also decreased, falling 13 percent to 27.9 tonnes.

“The government’s focus on unaccounted income continued to crimp this part of the market, with retail investors wary of heightened surveillance. Dealers also reported a negative spill-over from the faltering real estate market, traditionally a source of cash with which to fund gold purchases,” states the WGC.

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