The World Gold Council reported the trends in gold demand for the second quarter and first six months of 2017 on Aug. 3.
On a year-over-year basis, demand was down 10% in the second quarter with 953.4 tonnes and down 14% in the first six months with 2,003.8 tonnes.
Both declines are attributed to sluggish demand in the ETF sector, which saw a surge in the first half of 2016.
Compared to a year ago, central banks purchased 3% less gold in 2017 for a total volume of 176.7 tonnes.Ă‚
An improvement in the demand for jewelry, bar and coin investments and modest gains in technology were not enough to completely offset the aforementioned declines.
The World Gold Council also said the long-term demand for jewelry will remain weak.
Source: World Gold Council
By absorbing more than three-quarters of worldwide first-half net inflows, gold held in European ETFs reached an all-time high with 978 tonnes in the second quarter of this year. Global gold demand in the ETFs and similar product sectors was 167.9 tonnes in the first six months of 2017 versus a total volume of 579.4 tonnes in the comparable period of 2016.
Chinese, Indian and Turkish investments drove the demand for bars and coins up 13%, from 212.9 tonnes in second-quarter 2016 to 240.8 tonnes in second-quarter 2017, and up 11%, from 478 tonnes in the first half of 2016 to 531.7 tonnes in the first half of 2017.
Jewelry purchases for the Akshaya Tritiya – the Hindus' and Jains’ annual spring festival in India – led the growth in the global demand of jewelry, which was 967.4 tonnes in the first half of the year versus a total volume of 922.4 tonnes in the comparable period of 2016.
Central banks and institutions continued increasing their reserves of gold, but at a slower pace. In the first half, the gold volumes purchased by central banks was 176.7 tonnes versus a total volume of 182.5 tonnes in the comparable period of 2016.
The production of new smartphones, an increase in the use of wireless chargers and the development of LED features boosted the technology demand in the first half of 2017, reaching a total volume of 160 tonnes of gold.
Gold is trading around $1,257.70 per troy ounce on the London Bullion Market; this is nearly $9 per troy ounce lower than the average price since the beginning of August. However, it is up $19.52 per troy ounce compared to average price between Jan. 3 and Aug. 4.
Disclosure: I have no positions in any securities mentioned in this article.
