Central banks in gold rush amidst dollar worries

Posted by News Express | 2 May 2019 | 1,257 times

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The world’s demand for gold rose in the first three months of 2019 as central banks diversified away from the dollar amid concern over geopolitical instability, the World Gold Council industry body said Thursday.

Global demand increased by seven percent to 1,053.3 tonnes in the first quarter compared to a year earlier, the WGC said in a quarterly report on the precious metal.

Purchases by central banks hit 145.5 tonnes of gold, up 68 percent. That was the best performance for that period since 2013.

“Central banks are diversifying away from the dollar,” WGC spokesman John Mulligan told AFP.

The report added that “diversification and a desire for safe, liquid assets were again the main drivers of the purchases”.

Gold demand from exchange-traded funds (ETFs) meanwhile jumped 49 percent to 40.3 tonnes.

ETFs — which allow investment without trading on the futures market — witnessed the biggest inflows in the United States and also in Europe.

ETF demand for gold was “underpinned by continued geopolitical instability” in Europe, the WGC said.

The main two drivers of gold — which is regarded as a safe haven investment in times of economic turbulence — are investment buying and jewellery.

In the first quarter, jewellery demand rose one percent to 530.3 tonnes on particularly keen demand from India.

Bar and coin investment demand however fell one percent to 257.8 tonnes from a year earlier, hit by profit taking in Japan. (NAN)

Source: News Express

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