Investors shunned gold soon after Donald Trump’s upset presidential victory, suggests a new report from an industry group.
According to the World Gold Council (WGC), demand for the yellow metal plunged 18 percent in the first quarter of 2017 compared to the same time in the previous year. Despite a “really good” start to 2016, gold could not mimic that same success in the January-to-March period.
Gold demand reached 1,034.5 tonnes in the first quarter, which is the lowest first quarter in seven years. Demand for gold exchange-traded funds (ETFs) also plummeted by roughly 68 percent. Bar and coin investment remained healthy with a nine percent year-over-year (YOY) jump.
Even central bank acquisitions slowed in the first quarter of 2017 with just 76.3 tonnes added to reserves.
“Central banks showed a diminished appetite for gold purchases; China’s purchasing programme was on pause during the quarter as its foreign exchange reserves remained under pressure. Sales, once again, were sparse,” the report stated.
This trend may be reversed in the second quarter due to all of the economic uncertainty and geopolitical tensions, particularly in Europe and Asia.
Demand for the precious metal remained strong in China and India, two of the biggest buyers of gold in the world, because of the Chinese New Year and a higher demand for jewelry in India.
At the time of this writing, gold is trading at just under $1,250.
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