Global gold demand in Q1 2017 declined 18% to 1,034.5 tonnes

Almaty. May 12. Silkroadnews – The global gold demand in January-March 2017 declined 18% year on year and amounted to 1,034.5 tonnes, according to the World Gold Council report.

The data presented show, the inflows into ETFs amounted to 109.1 tonnes, still solid though a fraction of last year’s near-record inflows. Slowing of central banks demand also contributed to the weakness. At the same time, bar and coin investments showed a 9% increase year on year, amounting to 289.8 tonnes, with the strengthening of demand in the jewelry and technology sectors.

The first quarter of this year was marked by the activity of few large buyers. In particular, after a short break in December, Russia returned to the market: its gold and foreign exchange reserves increased by 64.9 tonnes to 1680.1 tonnes, increasing the share of gold in the country’s gold and currency reserves up to 17%, a record high since the first quarter of 2000. The National Bank of Kazakhstan added 9.6 tonnes to its gold reserves, showing a continuity in net purchases to 54 consecutive months.

In its turn, the PRC, that used to be one of the largest purchasers in recent years, keeps holding its gold reserves untouched since October 2016. According to the World Gold Council, this can be explained by changes in foreign exchange reserves. Despite the growth noted in February 2017 for the first time in the last 7 months, China’s foreign exchange reserves have been under serious pressure for some time, declining from $3.2 trillion in January 2016 to $3 trillion in January 2017.

With this as a percentage of total reserves China’s gold remains in the comfort zone – above 2%, reaching a record 2.4% in the first quarter with an increase in gold prices. This is the highest share since the early 2000s, and may partly explain the lack of gold purchases in recent months, the report says.