Gold jewellery demand slipped in Europe during the first quarter of the year, with France and UK named as the country’s leading the fall.
During Q1, gold jewellery demand dipped by 1% to 12.7t in Europe, with the World Gold Council stating the regional weakness was chiefly due to losses in the UK and France, where demand was hit by fragile economic outlook and political uncertainty.
On a global level gold jewellery demand increased by 1% compared to the same period last year, at 530.3t, boosted by India.
A lower local rupee gold price in late February and early March coincided with the traditional gold buying wedding season, lifting jewellery demand in India to 125.4t, a 5% increase on the same period last year and the highest Q1 since 2015.
Overall global gold demand grew to 1,053.3t in the first quarter of 2019, up 7% on the same period last year. This year-on-year increase was largely due to continued growth in central bank buying, as well as growth in gold-backed exchange-traded funds (ETFs).
Head of Market Intelligence at the World Gold Council, Alistair Hewitt, comments:L
“The beginning of 2019 saw a sharp recovery in investor sentiment in both the equity and debt markets, but appetite for gold remained solid. In Q1, central banks continued to increase their holdings of gold, while ETFs also saw an increase in inflows compared with the first quarter of 2018. European investment in ETFs hit a record high and this quarter’s figures suggest that the factors that are driving the investment – negative yields on Eurozone sovereign debt, geopolitical uncertainty and financial market volatility – will continue to underpin investment demand. In addition, central banks on both sides of the Atlantic putting monetary policy tightening on hold – and potentially easing – is likely to be supportive of gold.”
The total supply of gold was largely unchanged in Q1 at 1,150t. Modest growth in mine production and recycling was offset by a decline in net hedging. Mine production and recycling levels saw small increases compared with Q1 2018, rising to 852.4t and 287.6t respectively.