Research library

Germany’s gold investment market has boomed in the past 10 years. In the face of successive financial crises and loose monetary policy, German investors turned to gold to protect their wealth.

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.

Sovereign wealth funds, like many other investors, are under pressure to generate returns in a low-yield, low growth environment. Many are expanding into alternative assets to seek growth and income opportunities. Despite this, few sovereign wealth funds have invested in gold due to ongoing misconceptions about gold’s performance, financial behaviour, and liquidity.

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

Q2 gold demand of 953.4t was 10% lower than 2016, while H1 demand slowed 14% to 2,003.8t. 

Fintech innovations are changing the gold market. Learn about the impact in Gold investor. Includes contribution from Dr YV Reddy.

The gold market is broad and complex, so producing statistics on demand and supply is challenging. But having such statistics is crucial to understanding the fundamentals of the market. 

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.

Global gold demand in Q1 2017 was 1,034.5t. The 18% y-o-y decline suffers from the comparison with Q1 2016, which was the strongest ever first quarter. Inflows into ETFs of 109.1t, although solid, were nonetheless a fraction of last year’s near-record inflows.