Gold demand in Q1 falls 7% globally to USD 42 bn: WGC

Gold demand during the first quarter of this year slumped 7 per cent globally to USD 42 billion compared with the same quarter of 2014, mainly due to declines in China, Turkey, Russia and the Middle-East, according to the World Gold Council (WGC).
The gold demand stood at USD 45 billion in the first quarter of 2014, data in WGC 'Gold Demand Trends First quarter 2015' report showed.
In volume terms, the total demand fell 1 per cent for Q1 2015 at 1,079 tonne, against 1,089.9 tonne in the same quarter last year.
Global demand for jewellery, still the most significant component of the overall demand, dropped 3 per cent to 601 tonnes in the first quarter this year, from 620 tonnes last year.

Investment demand, the other key driver of the world's gold market, went up 4 per cent to 279 tonnes in Q1, up from 268 tonnes in Q1 of 2014.
There were net inflows of 26 tonnes into gold-backed Exchange Traded Funds (ETFs) -- turning positive for the first time since the fourth quarter of 2012 as investor sentiment returned to gold, the report pointed out.

Investment in bars and coins came under pressure in the face of buoyant stock markets, especially India and China, and currency fluctuations in Turkey and Japan. However, this was offset by strong retail investor demand in the euro zone, mostly in Germany and Switzerland.

During the quarter, central banks continued to be strong buyers, purchasing 119 tonnes in the quarter, the same volume as in Q1 2014.
This, the report said, was the 17th consecutive quarter that central banks have been net purchasers of gold as they continue to seek diversification away from the US dollar.
Furthermore, the report added that the total supply remained unchanged at 1,089 tonnes as a 2 per cent rise in mine production in Q1 of 2015 to 729 tonnes was balanced by a 3 per cent fall in recycling to 355 tonnes, compared with the same quarter last year.

"The global gold market's ecosystem functioned healthily during the first three months of 2015, illustrating the unique nature of gold and its ability to rebalance across sectors and geographies. This broadly stable global picture belies regional and sector differences which include a 10 per cent drop in jewellery demand in China and a 22 per cent uptick in jewellery demand in India," WGC Head of Market Intelligence Alistair Hewitt said here.
Consumers in eastern countries dominated the market, with China and India alone accounting for 54 per cent of total global consumer demand in the quarter, he added.