Gold Demand in First Quarter Breaks All Record
Demand for Gold, shot up in first quarter of 2016, to 1289.8 tons, surpassing all previous first quarter record and supply for the quarter, according to report from World Gold Council. Overall demand was 21% higher than previous year.
Key highlights –
- Jewelry demand was much softer at 481.9 tons, down -19% from a year back and much below its five year average of 589 tons. India was the major contributor to the drop in demand, along with China, two of world’s largest consumer. Demand in India was at 116.6 tons, almost half of its 5 year average and down -39% from a year back. Demand in China, declined -12% y/y to 247.4 tons. In contrast to that Demand rose 21% in United States to 40.9 tons.
- Central banks purchased 109.4 tons, -3% lower than prior year and much below its 5 year average of 141.2 tons.
- Major chunk of the demand came from investments, which was at 617.6 tons, 122% higher compared to last year and more than double of its last 5 year average. ETF demand was 363.7 tons compared to 25.6 tons a year back and -34.1 tons, 5 year average.
Supply was 5% higher at 1134 tons, broadly in line with 5 year average at 1108 tons.
Compared to first quarter, ETF demand is likely to mute in the second, however we expect Gold to remain well bid in the medium term.
Gold is currently trading at $1274/troy ounce.