Gold demand rallied in the closing months of 2017, gaining 6% year-on-year in Q4 to reach 1,095.8 tonnes (t). However, overall demand for the full year fell by 7% to 4,071.7t, compared with 2016, according to the World Gold Council’s latest Gold Demand Trends report.
Inflows into exchange-traded funds (ETFs) continued steadily throughout the year, totalling 202.8t, but lagged behind the exceptional levels seen in 2016. Similarly, although central banks continued to add to reserves, purchasing 371t in 2017, buying was down 5% year-on- year.
Full-year bar and coin demand fell 2% as US retail investment dropped sharply. However, the year saw a recovery in both jewellery and technology demand, each making modest gains compared with 2016, as improving economic conditions lifted consumer sentiment in India and China, and an increase in gold-containing technology, such as smartphones and tablets, boosted demand.
Alistair Hewitt, Head of Market Intelligence at the World Gold Council, commented:
“It’s not surprising to see overall gold demand down given the backdrop of monetary policy tightening and strong equity markets in 2017, but the market is not in bad shape. The US dollar gold price was up 13% and institutional investors, especially in Europe, continued to add gold to their portfolios as a hedge against frothy asset prices and geopolitical uncertainty. “Jewellery demand picked up as economic conditions improved in China and a policy change in India removed a barrier to demand, while next-generation smartphones boosted gold demand from technology companies.”
Mine production inched to a record high of 3,269t in 2017, while recycling fell 10%, leading to total supply dipping 4% to 4,398t. The introduction of stringent environmental controls in China led to a 9% fall in mine production in the region, whilst the ongoing concentrate exports ban continued to impact output in Tanzania. Total net de-hedging in 2017 reached 30t, bringing to an end three consecutive years of modest net hedging.
The key findings included in the Gold Demand Trends Full Year 2017 report are as follows:
Full Year 2017 figures:
Q4 2017 figures:
The Gold Demand Trends Full Year 2017 report, which includes comprehensive data provided by Metals Focus, can be viewed at https://www.gold.org/research/gold-demand-trends and on our iOS and Android apps. Gold Demand Trends data can also be explored using our interactive charting tool https://www.gold.org/data/gold-supply-and-demand/gold-market-chart.
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ENDS
For further information please contact:
Stephanie Mackrell
World Gold Council
T +44 207 826 4763
E [email protected]
Kate Savage
Edelman
T +44 203 047 2587
E [email protected]
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World Gold Council
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