JOHANNESBURG (miningweekly.com) – Global gold demand has fallen 18% in the first three months of 2017 compared with the first quarter of 2016, the World Gold Council reported on Thursday.
In tonnage terms, demand in the period was down 228.3 t, tumbling from 1 262.8 t in the first quarter of last year to 1 034.5 t in the corresponding period of this year.
This year’s inflows into exchange traded funds (ETFs) are a fraction of last year’s inflows, plummeting 68% to 109.1 t – a drop of 233 t compared with a high 342.1 t.
In addition, central bank demand fell by 27% to 76.3 t, nearly 28 t less than in the first quarter of 2016.
World Gold Council market intelligence head Alistair Hewitt attributed gold’s year-on-year demand fall largely to last year’s exceptionally high tally.
“Although we didn’t see the record-breaking surges in ETF inflows experienced in the first quarter of 2016, we have seen good inflows nonetheless this quarter, with strong interest from European investors ahead of the Dutch and French elections,” Hewitt stated in a release to Creamer Media’s Mining Weekly Online, in which he also remarked on the strength of retail demand, noting that it was 9% up at 290 t and worth $11-billion-plus.
China led the way on the private investment front, with Chinese bar and coin demand surging 30% to 106 t, fuelled by concerns over potential currency weakness and a frothy property market.
“Elsewhere the picture was less rosy; central bank demand was down and jewellery demand is still in the doldrums,” Hewitt said, adding that improvement signs were emanating from India in particular.
However, Indian jewellery demand remains 18% below the country’s five-year quarterly average, even though it consumed a 15%-higher 124 t of gold jewellery owing to Reserve Bank of India remonetisation buoying consumer sentiment.
Technology demand rose by 3% to 78.5 t, driven mainly by demand in the electronics industry, which rose 4% to 62.1 t of gold. Demand from general industry rose 1% to 12.1 t, but dentistry demand fell 5% to 4.3 t.
LOWER GOLD SUPPLY
The total supply of gold in the three months to March 30 was a 12 %-lower 1 032 t, mainly on a 21% recycling fall to 283 t.
Mine production of 764 t in the same period was little changed from 768 t in the corresponding three months of last year.
OFFICIAL GOLD HOLDINGS
The US is still the largest single holder of official gold with 8 133 t; Germany is second with 3 377 t and the International Monetary Fund third with 2 814 t.
South Africa is well down the list, in twenty-ninth position on the top forty list, with 125 t, which represents 11% of this country’s total financial reserves, whereas gold holdings represent 75% of US reserves and 69% of Germany's reserves.