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India, a nation that accounts for around a fifth of annual global gold demand, has a long history of gold-focused policies. These, however, have often distorted the market rather than achieving policymakers’ aims. Announcements in the Union Budget on 1 February 2018, however, suggest this might change.

The World Gold Council is pleased to announce the release of its "Guidance for Monetary Authorities on the recommended practice in accounting for monetary gold".

Ezechiel Copic, Director, Central Banks and Public Policy in conversation with Kenneth Sullivan, author of the new report Guidance for Monetary Authorities on the recommended practice in accounting for monetary gold on why the World Gold Council commissioned this guidance and how it can benefit monetary authorities.

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. 

Natalie Dempster, Managing Director, Central Banks & Public Policy at the World Gold Council in conversation with Will Jackson-Moore, Global Private Equity & Sovereign Investment Fund Leader at PwC on gold and alternative asset classes for Sovereign Wealth Funds.

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. 

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.

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

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. 

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.