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Gold demand rose by 2 per cent as investment surge: WGC
Global gold demand grew by 2 per cent in 2016, to 4,309 tonne, mainly driven by inflows into gold-backed Exchange Traded Funds (ETFs) in the US and surge towards bars and coins in China during the fourth quarter, according to World Gold Council
Mumbai: Global gold demand grew by 2 per cent in 2016, to 4,309 tonne, mainly driven by inflows into gold-backed Exchange Traded Funds (ETFs) in the US and surge towards bars and coins in China during the fourth quarter, according to World Gold Council (WGC). The total demand in 2015 stood at 4,216 tonne, WGC data revealed. "Global gold demand rose by 2 per cent in 2016 to 4,309 tonne, the highest level since 2013.
This was driven by inflows into gold-backed ETFs of 532 tonne, the second-highest year on record, as investors responded to concerns over future monetary policy, geopolitical uncertainty and negative interest rates," WGC's Gold Demand Trends report has revealed. "In China, the demand for bars and coins surged in the fourth quarter due to price dip in November and currency weakness also helped to boost overall investment demand by 70 per cent, to a four-year high of 1,561 tonne," WGC Managing Director, India, Somasundaram PR told PTI here.
The rise in overall investment demand was also aided by continued global economic and political uncertainty, most notably Brexit and the US elections, the report said. "Last year saw an unprecedented degree of political upheaval, which underpinned huge institutional investor flows into gold. Retail investors – having been subdued for most of the year - responded quickly to the price fall in Q4, a fact reflected by a surge in demand in the physical market.
With an equally uncertain political and economic environment likely in 2017, we expect investment demand to remain buoyant," WGC Head of Market Intelligence, Alistair Hewitt commented. While overall investment demand rose sharply, it was counter-balanced by declines in both jewellery, which saw a 15 per cent fall in 2016 to 2,042 tonne, and central bank purchases, the report cited. The Central bank's buying, faced by increased pressure on foreign exchange reserves, declined by 33 per cent to 384 tonne for the year, it said. Despite this, 2016 was the seventh consecutive year of net purchases by central banks, the report revealed.
