Demand for investment gold fell in 2017

Demand for investment gold fell by more than 20% last year to 1,232 tonnes, according to the latest annual report from the World Gold Council. This decline is almost entirely attributable to the so-called ETFs, as global sales of Gold Coins and Gold bars remained at about the same level as one year previously. Due to the sharp rise in share prices and the relatively stable gold price, investors opted more often for shares and avoided exchange traded funds for gold. In 2016, gold ETFs added 546.8 tonnes to their stocks, but last year it was only 202.8 tonnes.

The popularity of investing in gold through exchange-traded funds declined sharply last year, but the same cannot be said for the physical coins and bars. In China, this market grew by 8% last year to 306.4 tonnes, while the Indian market grew by 2% to 164.2 tonnes. Elsewhere in the world, such as in Turkey and in Europe, many coins and bars were sold again last year. The fact that there was no more investment gold traded worldwide is the result of a sharp drop in demand in the United States. In 2016, 93 tonnes of coins and bars were sold there, but last year this had fallen to only 39.4 tonnes. That was the lowest level since 2007.

Central banks continue to buy gold

Figures from the World Gold Council also show that central banks bought a lot of gold again last year. Especially Russia, Kazakhstan and Turkey added large amounts of precious metal to their reserves. Also, the demand for gold for jewelry production increased last year, likely due to a growing global economy. As a result, people have more money to spend on these types of luxury goods. Due to the growth of the global economy, there was also more demand for the precious metal for industrial applications, for example in electronics and cars, for the first time in a long time.