Global gold demand fell 18% in Q1 compared to the same quarter last year, which had set a record.
The World Gold Council (WGC) described inflows to gold ETFs as a “fraction” of last year’s total, but said demand was still “solid”.
Total gold demand reached 1,034 tonnes and, of that, ETF inflows were 109 tonnes – a third of the Q1 2016 figure – and largely concentrated in Europe. Europe’s demand was put down to political fragility in the region.
Slower central bank demand also contributed to the weakness overall, but bar and coin investment was “healthy” at 290 tonnes, an increase of 9% year-on-year.
Alistair Hewitt, head of market intelligence at WGC, said: “Demand is down year-on-year, but that is largely because Q1 last year was exceptionally high.
“Although we did not see the record-breaking surges in ETF inflows experienced in Q1 2016, we have seen good inflows nonetheless this quarter, with strong interest from European investors ahead of the Dutch and French elections.”
He also said retail investment demand for gold was strong, increasing 9% year-on-year. China led the way with bar and coin demand surging 30%, fuelled by concerns over potential currency weakness and a “frothy” property market.
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