Gold Demand Up 21 per cent

Gold Demand Up 21 per cent.

The World Gold Council has issued figures that globally, the demand for Gold increased by 21% in the first three months of 2016 compared to the same period in 2015.  Demand for January, February and March 2016 hit 1,290 tonnes.

This was the second largest increase on record driven by economic uncertainty as we enter what many believe is the ‘perfect storm’ with US interest rate increases expected, the UK Referendum on the Brexit vote, which will not just impact on the UK but has far reaching economic consequences in connection with global trade as well as the stability of the European model.  In addition, there is also the uncertainty with the US Presidential election later this year with Trump probably going head-to-head with Clinton.

Investors are the main drivers, with Exchange Traded Funds creating most demand, as people shy away from stock markets.  In addition, India is buying up more gold and central banks also appear to be bolstering their reserves to under pin currency.

In UK, according demand for physical gold, not gold stocks and shares, nearly doubled in the first 3 months although the British Government has not increased its gold reserves for over a year.

Comment

We suggested last year that we would buy gold with markets tumbling and did so, ahead of this demand increase and of course demand with economic instability will push prices up.