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Demand for investment gold on the up

Monday, February 6, 2017

Demand for investment gold rose to its highest levels since 2013 last year, according to the latest annual report from the World Gold Council.

Investors bought a total of 4,309 tonnes of bullion in 2016, a two per cent rise on 2015 thanks to a surge in gold backed exchange traded funds, the research revealed.

In the UK, the demand for gold bullion coins and bars jumped by 28 per cent to almost 11 tonnes. The figure in the UK rose after the value of the pound dipped following the Brexit vote last June, as investors looked for a secure and portable safe haven for their money.

Internationally, demand for physical gold for jewellery and investment bars and coins dipped by nine per cent. This was mainly due to the introduction of curbs on imports and higher prices in the two biggest gold buying nations of China and India. In addition, central banks reined in their gold investment by a third in 2016.

Looking ahead, the World Gold Council expects demand from China – the top gold importing nation – to improve this year. It expects China to import between 950 and 1,000 tonnes of the precious metal in 2017, compared to 2016’s figure of 913.6 tonnes. This was the lowest recorded demand in four years.

In India, demand this year is predicted to remain around the same levels. Indian consumers bought 675.5 tonnes in 2016, and are expected to purchase between 650 and 750 tonnes this year. The Indian government has introduced strict policies to try to drive down the amount of gold being imported and encourage domestic recycling of the precious metal; efforts which are now starting to show results.

Our gold coins and gold bullion track the gold price, so keeping a close on movements like this is well worth it to ensure you buy at the right point for your investment plans.