WGC: Gold Demand in Q1 2018 Collapsed to Decade Low Level

SEATTLE (Scrap Monster): The latest Gold Demand Trends Report published by the World Gold Council (WGC) suggests significant decline in gold imports during the initial quarter of 2018. The ‘Gold Demand Trends Q1 2018’ report states the demand dropped to the lowest level since Q1 2008. The huge drop was mainly on account of notable decline in investment demand for gold bars and gold-backed ETFs and partly due to the range-bound gold prices.The gold demand totaled 973.5 tonnes in Q1 this year.

The global jewellery demand remained more or less flat at 487.7 tonnes, falling marginally by 1%. The rising local gold prices and weak currency resulted in weak jewellery demand in India, which was partially offset by growth in demand in China and the U.S. The Indian demand fell sharply by 12%. The U.S reported highest jewellery demand since Q1 2009. The demand for gold in the technology sector continued to improve during Q1 2018.

The inflows to ETFs totaled 32.4t during the quarter, which was very much lower by 66% when compared with 96t of inflows seen in Q1 2017. The North American-listed ETFs saw addition of 38.4t, but was offset by outflows elsewhere. The bar and coin investment dropped sharply in India and China. The overall demand dropped by 15%, mainly on the back of 26% decline in China and 13% decline in India. Investment in Europe was more or less flat. The overall gold investment demand dropped sharply by 27%.

The net purchases by world central banks were up by 42% in Q1 2018, when compared with the previous year. The net purchases totaled 116.5t. Russia, Turkey and Kazakhstan were the three largest net buyers. The combined net purchases by these countries totaled 91t. Russia’s purchases alone totaled 41.7t. On the other hand, Qatar reduced its gold reserves by 3.1t. Germany and Ukraine too reduced their gold holdings in Q1 this year.