Surging inflows into gold-backed exchange-traded funds drove global gold demand to its highest first-quarter total on record this year, despite a near 20 percent drop in jewellery buying, the World Gold Council said on Thursday.
Demand hit 1,290 tonnes in the period, the WGC said in its latest Gold Demand Trends report, the best first quarter and second strongest quarter overall since its data series began.
Investment in products like ETFs, coins and bars more than doubled to 618 tonnes, accounting for 28percent of the total. That helped fuel a 16 percent surge in gold prices in the period, its biggest quarterly rise in nearly 30 years.
"Two major themes emerged in the first quarter of 2016. Spurred on by the uncertainty raised by negative interest rates, the investment sector was the dominant driver of gold demand," the WGC's head of market intelligence Alistair Hewitt said.
"Conversely, jewellery demand endured a difficult quarter due to a continued lack of consumer confidence in the face of a weakening Chinese economy and a 42-day strike by jewellers in India."
Reference: World Gold Council, Reuters
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