Graphically Speaking

Panic haven

A spur in gold investments has fuelled the yellow metal's demand in the west 

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Published 7 years ago on Nov 07, 2016 1 minute Read
Source: WGC

It was a study in contrast in the first half of CY16. For the first time, demand for the yellow metal grew in the West and, in contrast, demand in the east, largely consumer-driven, tapered off. In fact, after two consecutive quarters, continued economic, political and social uncertainty around the globe fuelled investment demand for gold. The demand was largely driven by exchange traded funds that sought a safe haven in the metal. What stands out starkly is that the demand for the first-half of calendar year more than surpassed the demand in 2009, the year post the global credit crisis. Investors have boosted holdings in bullion-backed exchange-traded funds by 40% this year to the largest in three years. Incidentally, though demand was up, the price saw a chequered run — rising 7% during the first-half but not before plunging a couple of times in between. Though the gold price fell 8% in July from its high in more than two years to its current level of $1,290, it’s still up almost 20% in the current calendar year given the low or negative interest rates in developed economies as central banks around the world look to stimulate growth.