The investment demand for gold is surging. Gold ETFs globally saw inflows of 364 tonnes of gold in the January-March period, up from 26 tonnes in the same period last year, according to the data released by WGC last week. It is the highest inflow in a quarter in last seven years.
But demand for jewellery dropped. In the first quarter of the year, demand for gold jewellery totalled 481.9 tonnes, down 19 per cent over last year.
The increase in gold prices and the continuing weakness in consumer sentiments could be the reasons behind this drop in consumer demand. However, negative interest rates in Japan and Europe have stoked demand for the metal from investors.
“All measures by central bankers across the globe haven’t helped much in reviving growth and investors are losing faith in paper currency. That’s why we are seeing demand for gold go up,” says Gopal Agrawal, Chief Investment Officer, Mirae Asset Global Investments (India).
