WGC: Global Gold Demand Hit Lowest Level Since 2009

The steady gold demand in Q2 this year was mainly on account of slower ETF inflows.

SEATTLE (Scrap Monster): The Gold Demand Trends Report for Q2 2018 published by the World Gold Council (WGC) indicates that world gold demand stayed more or less unchanged during the quarter. However, the demand dropped by nearly 4% during the first six months of the year to hit the lowest level since 2009. The Q2 and HI gold demand in 2018 totaled 964.3t and 1,959.9t respectively.

The steady gold demand in Q2 this year was mainly on account of slower ETF inflows. When compared with the peak high period in 2016/17, the inflows have continued to remain more or less steady. The quarterly ETF inflows dropped significantly by 46% over the previous year. The Italian political situation and monetary policy outlook resulted in decent inflow into European-listed funds. On the other hand, the North-American listed funds witnessed a decline in holdings by 30.6t.

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Meantime, the gold bar and coin investment demand remained stable at 247.6t. The demand surged higher in China and Iran, whereas it registered declines in other major markets including Turkey, India and Europe. The Central Bank gold purchases in Q2 2018 were down by 7% over the previous year to 89.4t. The net purchases over H1 2018 were 8% higher than the previous year, mainly driven by Russia, Kazakhstan and Turkey. Also, Venezuela’s gold reserves saw notable reduction.

The Q2 gold jewellery demand has dropped by 2% to 510.3t, as compared with 519.4t in Q2 2017. The key drivers of the decline were India and the Middle East. The Indian gold demand tumbled by 8% year-on-year to 147.9t, primarily due to seasonal factors and high domestic gold prices. The jewellery demand across the Middle East fell by 35% to 6.6t. The weakness in these markets was partially offset by growth in demand in China and the U.S. markets, each reporting 5% growth.

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