Inflows into Gold-backed ETFs Matched Price-Driven Slump in Demand

SEATTLE (Scrap Monster): The analysis report for 2019 published by the World Gold Council (WGC) states that the tremendous rise in investment flows into gold-backed ETFs in 2019 was matched by the slump in consumer demand driven by record high gold prices. Overall, gold demand reported marginal decline by 1% to total 4,335.7 tonnes during the previous year.

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According to WGC, the investments in gold-backed ETFs totaled 401t in 2019, higher by 426% over the prior year. The North American funds reported largest net increase, adding 206t, whereas European funds saw addition of 188t. The sudden spike in inflows was mainly fuelled by monetary policy and geopolitics.

The central banks remained net buyers for the tenth year in a row, with global reserves reporting growth by 650.3t.

The fall in key markets including China and India led to 6% decline in global gold jewellery demand volume.

Meantime, the total annual gold supply edged higher by 2% to 4,776.1t. The gold mine production totaled 3,463.7t in 2019, marginally lower by 1% from 2018. At the same time, recycled gold supply skyrocketed 11% year-on-year to 1,304t, thereby hitting the highest level since 2012.