This compares with a relatively weak Q1 2018, when demand sank to a three-year low of just 984.2t. Central bank buying continued apace: global gold reserves grew by 145.5t. Gold-backed ETFs also saw growth: quarterly inflows into those products grew by 49% to 40.3t. Total bar and coin investment weakened a fraction to 257.8t (-1%), due to a fall in demand for gold bars; official gold coin buying grew 12% to 56.1t. Jewellery demand was a touch stronger y-o-y at 530.3t, chiefly due to improvement in India’s market. The volume of gold used in technology dipped to a two-year low of 79.3t, hit by slower economic growth. The supply of gold in Q1 was virtually unchanged, just 3t lower y-o-y at 1,150t.
Much of what is currently happening right in front of our eyes provide evidence of an unfolding sea change in the global monetary order. As the US Fed turns from monetary easing to monetary tightening, with uncertain outcomes for the global economy, investors’ trust in currencies issued by central banks is eroding. Blockchain technology has enabled a much-hyped boom in cryptocurrencies as investors seek alternatives to the US dollar, once perceived as an invulnerable safe haven. These shifting tides in the monetary system are coming to pass in different ways, at different velocities, and at different levels of visibility. On the cusp of fundamental change, it is particularly important not to lose sight of the forest for the trees.
Gold 2048 brings together industry-leading experts from across the globe to analyze how the gold market is set to evolve in the next 30 years.
Key insights from authors such as George Magnus, senior economist; Rick Lacaille, Global Chief Investment Officer of State Street Global Advisors; and Michelle Ash, Chief Innovation Officer at Barrick Gold include:
- The expanding middle class in China and India, combined with broader economic growth, will have a significant impact on gold demand.
- Use of gold across energy, healthcare, and technology is changing rapidly. Gold’s position as a material of choice is expected to continue and evolve over the coming decades.
- Mobile apps for gold investment, which allow individuals to buy, sell, invest and gift gold will develop rapidly in India and China.
- Environmental, social and governance issues will play an increasing role in re-shaping mining production methods.
- The gold mining industry will have to grapple with the challenge of producing similar levels of gold over the next 30 years to match the volume it has historically delivered.
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U.S. retail investors are losing their appetite for physical gold as buoyant stock markets offer tempting alternatives, sending sales of newly minted coins to their lowest in a decade.
More and more coins are also being sold back onto the market, further eroding demand for newly minted products.