Gold investment demand falls 34%, but WGC says it was still 'robust'

Image used for representational purpose only

Image used for representational purpose only

On a more positive note, demand for bars and coins rose over the first quarter, up 9 per cent year-on-year.

Total jewellery demand in India for Q1 2017 was up by 16 per cent at 92.3 tonne as compared to Q1 2016 (79.8 tonne). Demand was 18% below the 587.7t five-year quarterly average.

The first quarter fall in gold demand follows a 15 per cent annual plunge in global jewellery demand in 2016 to a seven-year low to 2,041.6 tonnes.

Gold demand in India shot up 15 per cent during the January-March quarter of 2017 even as global demand for the precious metal contracted by 18 per cent during this period, according to industry-funded World Gold Council's (WGC) trend report released on Thursday.

"Inflows into [gold] ETFs of 109.1t, although solid, were nonetheless a fraction of last year's near-record inflows", the Council said in a statement.

The slow central bank demand in the first quarter this year contributed to the decline with addition of 76 tonnes to the reserves compared to 104 tonnes in the same period last year.

MUMBAI/BENGALURU Gold demand in Asia rose this week, helped by a correction in prices, but traders said some buyers have held back from purchases while they wait for bullion prices to drop further.Analysts said gold buyers were expecting prices to dip in the upcoming days, banking on the possibility of the U.S. Federal Reserve hiking interest rates in June.

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Total gold demand in the country stood at 107.3 tonnes in the January-March quarter of 2016, hit by jewellers' strike over excise duty.

Gold advanced 8.9 percent in the first quarter from the end of December, as investors snapped up the precious metal amid political discord in the USA and Europe that halted gains in equity markets.

Inflows into gold-backed ETFs of 109t were largely concentrated in Europe.

"Elsewhere the picture was less rosy; central bank demand was down and jewellery demand is still in the doldrums", Hewitt said.

The drop in recycling indicates a return to more normal levels after sharp price movements drove exceptional levels in Q1, 2016, it said. While mine production was "little changed" from Q1 2016, clocking in at 764 tonnes, overall supply sank 12 percent and came in at 1,032 tonnes. We provide insights into the worldwide gold markets, helping people to understand the wealth preservation qualities of gold and its role in meeting the social and environmental needs of society. Chinese investment demand also was strong.

The World Gold Council has predicted a demand of 650-750 tonnes in India in 2017. "The 9% rise in the US$ price between end-December and end-March restrained demand, although U.S. dollar weakness meant that consumers in many markets were protected to some degree".

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