In its latest quarterly report, the World Gold Council (WGC) said that gold demand posted its weakest start to the year in a decade, Reuters reports.
“Global gold demand totaled 973.5 tonnes in the January to March period, down 7 percent year on year and the weakest first quarter since 2008. That coincided with a period of calm in the gold market, which saw prices hold within their narrowest range of any quarter in more than a decade.
The biggest drop in demand came from the investment sector, with bar and coin consumption down by 15 percent and buying of the gold-backed exchange-traded funds two-thirds lower year on year.
Chinese jewelry demand rose 7 percent to 188 tonnes, which Hewitt attributed to strong seasonal buying and a better product range. “
The WGC’s head of market intelligence Alistair Hewitt noted: “The rangebound gold price has certainly had an effect on investor sentiment. It works both ways - for people in the retail space, a price drop can be an entry point, and if the price is rising, people want to take advantage of that momentum.”
“A weakening rupee really pushed up the local gold price. You also had far fewer auspicious days. In Q1 last year, you had 22, and in Q1 2018 you just had seven. Auspicious days are important for weddings, and weddings are important for jewelry demand,” Hewitt added.