Q1 Gold Demand Boosted by Central Bank Purchases and ETF Flows

SEATTLE (Scrap Monster): The Gold Demand Trends Q1 2019 report published by the World Gold Council (WGC) points to notable surge in global gold demand, aided by central banks and ETFs. The gold demand was up by 7% year-on-year to 1,053.30 tonnes (t) in Q1 this year. This is in comparison with the relatively weak demand of 984.2t reported in the corresponding quarter a year before.

The Q1 net gold purchases by central banks around the world hit six-year high during Q1 2019. The global gold reserves reported addition of 145.5t. The inflows into gold-backed ETFs too recorded strong growth by 49% to 40.3t. The funds listed in the US and Europe benefitted from the inflows.

The gold jewellery demand edged higher marginally to 530.3t. Much of the demand growth came from India. The country’s jewellery demand soared 5% to touch 125.4t, the highest Q1 levels since 2015. Akshaya Tritiya- the traditional gold buying festival coupled with lower domestic gold prices lifted the demand. The U.S. demand continued to expand. The Middle East region too reported modest recovery in jewellery demand. On the other hand, demand dropped sharply by 10% in Iran.

The WGC Gold Demand Trends Q1 2019 Report also points to marginal 1% decline in bar and coin investment demand. Also, gold used in electronics, wireless and LED lightings dropped by 3% year-on-year.