Gold Takes a Big Hit in 2017, as Investment Demand Collapses by 23%

SEATTLE (Scrap Monster): The World Gold Council (WGC) has announced publication of its Gold Demand Trends Report for full year 2017. The report provides a sector-wise and geography-wise analysis of demand trends for Q4 and the full year 2017.

According to the report, gold investment demand dropped significantly by 23% over the previous year in 2017. The overall investments dropped from 1,595.5t in 2016 to 1,231.9t in 2017. Inflows into gold-backed ETFs witnessed considerable slowdown. The annual bar and coin demand too declined sharply during 2017. The investment demand had tumbled by nearly 28% in Q3 last year.

The annual global inflows into gold ETFs ended much lower when compared with 2016 levels. The annual global inflows totaled 202.8t, as compared with the inflows of 546.8t in 2016. Out of this, European-listed funds captured 148.9t, accounting for 73% of the total inflows. The US-listed ETFs added 63.0t, whereas the total holdings by Asian funds declined by 9.2t during the year.

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Much of the above inflows were concentrated during the first half of the year. The pace of inflows slowed down sharply in H2 2017. The inflows during H2 totaled only 42.1t in 2017, significantly lower when matched with the inflows of 160.7t recorded during H2 2016. However, investments bounced back in Q4, with quarterly inflows totaling 28.9t. The continued geopolitical tensions in different parts of the world continued to attract more investments to safer gold assets during the quarter.

The annual bar and coin demand dropped 2% to 1,029.2t, mainly on account of 10% drop in coin demand. The US recorded the biggest drop in demand, falling from 93t in 2016 to 39.4t in 2017, the lowest level in more than ten years. On the other hand, Turkey recorded 78% growth in annual demand. The Middle East demand more than doubled. Chinese demand surged higher by 8% over 2016. India too reported modest 2% jump in bar and coin demand during 2017.