Global Gold Demand Dips 14% in First Half of 2017

August 04, 2017 01:30:20 PM
SEATTLE (Scrap Monster): The ‘Gold Demand Trends Q2 2017’ report published by the World Gold Council (WGC) suggests considerable decline in demand for gold during the second quarter as well as the first half of the current year, upon comparison with the previous year. The Q2 2017 gold demand has declined by 10%, whereas the half-yearly demand has fallen even sharper by 14%. The Q2 and H1 demand totaled 953.4t and 2,003.8t respectively, said WGC Demand Trends Report.

According to WGC, the weakness in demand is mainly attributed to the drastic decline in gold ETF inflows during H1 this year. The inflows had witnessed huge surge in the corresponding six-month period in 2016. However, global ETF holdings increased by 56t during the second quarter. Also, ETF holdings during H1 2017 were up by 167.9t. The European region dominated the ETF market during this period, accounting for 76% of total inflows. The ETFs listed in the European region recorded growth of 128t during first half of 2017.

Meantime, the bar and coin demand rose by 13% when compared with the corresponding quarter last year to total 240.8t. The Chinese bar and coin demand surged higher by 56% over the previous year to touch 62.6t during the quarter. India reported third consecutive quarter of demand growth. The quarterly demand by the country was up by 26% to 4.7t. The Turkish demand too spiked up during Q2 this year. On the contrary, US markets remained weak. The bar and coin demand in H1 this year remained strong, reporting year-on-year growth of 11%.

The central bank net gold purchases totaled 94.5t in Q2, significantly higher by 20% than Q2 2016. The Russian Central Bank added 35.7t to its gold reserves, whereas Kazakhstan’s gold reserves grew by 11.3t. Russia now accounts for 17% of the total official gold holdings by world’s Central Banks. The Central Bank of Turkey purchased 21t during the quarter. On the other hand, Germany’s official gold reserves reduced by 3.8t. The cumulative purchases during H1 2017 totaled 176.7t.

The totaled gold supply declined by 8% in Q2 this year. The gold mine production remained essentially flat at 791.2t. The Chinese mine production dropped by 8%. The mine output by Tanzania and Mongolia plunged by 20% and 30% respectively. These drops were offset by production gains in Indonesia (+30%) and Canada (+8%). Supply of recycled gold witnessed 18% decline from 342.5t in Q2 2016 to 279.9t, with East Asian and Middle Eastern markets reporting significant decline in supplies.