Gold demand reached 1,290 tons Q1 2016, a 21% increase year-on-year, making it the second largest quarter on record. This increase was driven by huge inflows into exchange traded funds (ETFs) – 364t – fuelled by concerns around the shifting global economic and financial landscape. Higher prices and industrial action in India pushed global demand for jewelry down (-19%), while total bar and coin demand was marginally higher (+1%). Central banks remained strong buyers, purchasing 109t in the quarter. Total supply increased 5% to 1,135t. Hedging by producers (40t) supported an increase of 56t in mine supply, although countered by a marginal decline in recycling.
Overall demand for Q1 2016 increased by 21% to 1,290t, up from 1,070t in Q1 2015.Total consumer demand was 736t down 13% compared to 849t in Q1 2015.Global investment demand was 618t, up 122% from 278t in the same period last year.Global jewelry demand fell 19% to 482t versus 597t in the first quarter of 2015.Central bank demand dipped slightly to 109t in Q1 2016, compared to 112t in the same period last year.Demand in the technology sector fell 3% to 81t in Q1 2016.Total supply was up 5% to 1,135t in Q1 2016, from 1,081t in the first quarter of 2015. Mine supply was up 8% to 774t.Gold held steady on Wednesday as bullion found little impetus from weaker equities as the dollar rose to a four-month high on the back of better-than-expected U.S. housing data.U.S. homes surged 4.8 percent to a seasonally adjustedannual pace of 1.19 million units, the Commerce Department said on Tuesday.Prices have since retreated, hit by a series of positive U.S. economic data, while uncertainty around the implications of the Brexit vote eased.“There is talk of some further accommodation being doledout, in which case we could see gold moving a little higher fromhere,” said INTL FCStone in its article. Technical charts also suggest a bearish target at $1,313 forspot gold, Reuters technical analyst Wang Tao said.Investors are now waiting for the outcome of the EuropeanCentral Bank meeting on Thursday for further cues.