Gold demand marginally down in 2018

India’s gold demand for 2018 was marginally do­wn at 760.4 tonnes in 2018 against 771.2 tonnes in the previous year. Both je­w­ellery and investment dem­and were down in 2018 as well as in Q4 of the calendar year. 

Jewellery demand in In­d­ia for 2018 was down by one per cent at 598 tonnes as compared to 601.9 ton­n­es in 2017 and the investment demand was down by 4 per cent at 162.4 tonnes against 169.3 tonnes in the previous year.

“Consumers were cautious in the face of high and volatile local gold prices. Investment demand received its usual seasonal boost during Diwali with 56.4t – the strongest quarter in the ye­ar, but still it was 5 per cent down from Q4 2017. Dem­and was constrained due to relatively fewer auspicious wedding days and higher price volatility leading to a particularly pronounced effect on Q4 gold demand,” said Somasundaram PR, managing director, India, World Gold Council.

Recycled gold demand too was marginally down, in­dicating that the seconda­ry market too remained subdued. “The trends since 2015 indicate rather clearly that transparency measures have had an impact on gold de­mand. There is an urgent need for the industry to org­a­nise and collectively address issues of trust and inn­o­vation, in order to face the inevitable next wave of tr­a­n­s­parency measures and gr­ow gold’s share of consumer spend. Considering the imp­­ending elections and a li­k­e­ly increase in spending, we expect full year demand to be in the range of 750-850 tonnes,” said Somasund­a­ram. Global demand was 4 per cent up in 2018 at 4345 to­n­n­es. RBI buying to­u­ched a new record high of 651.5 tonnes, while coin dem­and surged to reach a five-ye­ar high of 236.4 tonnes, the second highest on re­c­o­rd.

Inflows into gold-backed exchange traded funds fell 67 per cent to 69 tonnes ag­a­inst 206.4 tonnes in 2017. But Q4 of 2018 saw ETF inf­lows surging. Stock market volatility and signs of falteri­ng economic growth in key ma­rkets fuelled a recovery in Q4 2018, with inflows gr­o­wing to 112.4 tonnes from 32.5 tonnes.

“I don’t see any of the risks that investors and central banks are worried about fading anytime soon and I expect gold to remain an attractive hedge in 2019,” said Alistair Hewitt, Head of Market Intelligence at the World Gold Council.

Sangeetha G.