Research library

Gold demand of 973.5t was the lowest Q1 since 2008. The main cause was a fall in investment demand for gold bars and gold-backed ETFs, partly due to range-bound gold prices. 

The strong gold price performance was a positive for investors and producers, and was symptomatic of a more profound shift in sentiment: a growing recognition of gold’s role as a wealth preservation and risk mitigation tool. This goes to the heart of our strategy to make gold a mainstream asset.

Gold demand rallied in the closing months of 2017, gaining 6% year-on-year (y-o-y) to 1,095.8 tonnes (t) in Q4. But it was too little, too late: full year demand fell by 7% to 4,071.7t. 

Some commentators went as far as to claim cryptocurrencies could replace gold. Cryptocurrencies may become an established part of the financial system. But, in our view, gold is very different from cryptocurrencies.

Gold is a highly liquid yet scarce asset, and it is no one’s liability. It is bought as a luxury good as much as an investment. As such, gold can play four fundamental roles in a portfolio.

Welcome to the winter edition of Gold Investor, where leading commentators and market participants discuss new developments for gold and its evolving global role.

The third quarter saw a 9% year-on-year (y-o-y) drop in gold demand to 915 tonnes (t). Year-to-date (y-t-d) demand was down by 12%.  ETFs had another quarter of positive inflows, but at 18.9t, they fell far short of the 144.3t influx in Q3 2016. 

With an annual demand of approximately 800-900 tonnes, the size of the Indian gold market is second only to that of China. Despite its significant size and important global position, the Indian gold market is unable to realise its potential due to multiple challenges.

Welcome to the autumn edition of Gold Investor, where leading commentators and market participants discuss new developments for gold and its evolving global role.

On 1st July, India’s labyrinth of taxes will be replaced with a simple, nationwide Goods & Services Tax (GST). This is the biggest fiscal reform since India’s liberalisation in the early 1990s. While gold consumers will face a slightly higher tax rate, and the industry will go through a period of adjustment, we see the net impact on the gold industry as being positive. The gold supply chain should become more transparent and efficient, and the tax reform can boost economic growth, which we see as supporting gold demand.