Gold demand jumps 15 pc in January-March

A salesperson attends to a customer inside a jewellery showroom during Akshaya Tritiya a major gold-buying festival in Mumbai

Gold demand jumps 15 pc in January-March

Overall jewellery demand in the quarter rose 1 per cent to 480.9 tonnes versus 474.4 tonnes in a year-earlier period as higher gold prices impacted sentiment.

Total jewellery demand was up by 16 per cent at 92.3 tonne in the fist quarter of 2017, compared to 79.8 tonne in the same period past year. Total investment demand for the period was up 14 per cent at 31.2 tonnes against 27.5 tonnes in the same period of 2016. "However, the demand continues to be relatively low in historical context, 18% below the quarterly average of five years", the report said.

Jewellery demand in the first quarter was marginally up at 481 tonne from Q1 2016.

Global gold demand in the March quarter was 1,034.5t, according to the World Gold Council (WGC).

There was an 18-percent decrease in the first quarter of 2017 compared with the same period previous year, with demand hitting 1,034.5 tons, the report said. Slower central bank demand also contributed to the weakness, with 76 tonnes added to reserves, compared with 104 tonnes added in the first quarter of 2016.

MUMBAI/BENGALURU Gold demand in Asia rose this week, helped by a correction in prices, but traders said some buyers have held back from purchases while they wait for bullion prices to drop further.Analysts said gold buyers were expecting prices to dip in the upcoming days, banking on the possibility of the U.S. Federal Reserve hiking interest rates in June.

The second quarter (April to June) is also likely to be robust given the 30 percent rise reported on Akshaya Tritiya this year when compared to last year. Demand firmed slightly in both the jewellery and technology sectors while investment in gold bars and coins grew by nine per cent at 289.8 tonnes.

Gold demand globally remains heavily influenced by India and China, which together account for over half of the market.

Inflows into gold-backed ETFs of 109.1t were concentrated in Europe.

The UAE started in January slapping a 5 per cent import duty on gold jewellery, a move that is expected to lead to higher prices and subdued consumer demand.

The government's push for transparency in India's economy began to take effect in the gold market, with a gradual shift towards electronic transactions, it said.

Mine production of 764 tonne was little changed from Q1 2016 (768 tonne), and in line with the expectation that production will remain broadly steady before tailing off, the report added. Chinese investment demand also was strong.

The WGC has estimated that 100-120 tonnes of smuggled gold entered India in 2016. Demand across the rest of the region remained weak in the face of low oil prices and subdued tourist numbers, the impact of which was exaggerated by rising gold prices.

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