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Gold demand falls worldwide, rises in Kuwait
February 17, 2018, 2:18 pm

Although global demand for gold rallied in the closing months of 2017 it was a case of too little too late, as full-year demand for the shiny metal fell by 7 percent to 4,071.7 tonnes (t), said the World Gold Council (WGC), the UK-headquartered market development organization for the gold industry.

Reporting on the Gulf region, the WGC said that the UAE, the leading gold market in the region, showed a fourth consecutive annual decline in demand for gold jewelry, dipping to a 20-year low in 2016. Despite a 16 percent spike in demand during the fourth-quarter of 2017, ahead of 5 percent value-added-tax (VAT) that came into effect from January 2018, the total annual purchases fell by 2 percent to 42.8t. Per capita gold consumption in UAE dropped by nearly half from 8.7 grams in 2016 to 4.8 grams in 2017. Saudi Arabia, the region’s biggest buyer, bought 45.7 tons of gold jewelry last year, down 8 percent, according to the report. Egypt’s purchases also slumped 14 percent to 22t.

Kuwait and Iran were the two bright spots in the Middle-East, with both countries showing a higher demand for gold jewelry. Kuwait’s gold jewelry demand climbed 4 percent to 13 tons, while Iran came close to beating Saudi Arabia with record demand for gold jewelry touching 45.4t. This renewed lust for gold was a 12 percent hike from a year earlier and also the highest demand since 2013.

In its annual assessment of gold demand trends in 2017, the WGC reported that Central Banks added 371.4 t to their official gold reserves, which was 5 percent down from the figures in 2016, while demand for gold bars and coins also fell by 2 percent, mainly from a sharp drop in US retail investment. While inflows from Exchange Traded Funds (ETF) added 203t to global demand, it too was a steep fall from the 547t demand in 2016. India and China showing a 4 percent recovery in gold jewelry were the main glitter spots in an otherwise lack-luster market, but even here the figures were well below historical averages.

Meanwhile, gold production was at a record high of 3,268.7t, but total supply was impacted by a 10 percent fall in gold recycling. Also, newly introduced stringent environmental controls in china led to 9 percent fall in national production.


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