- Global demand for gold fell 1% in the first three months of this year, as tepid buying in key markets took some of the shine off the metal, the World Gold Council said Thursday.
Demand totaled 1,079 metric tons in the first quarter, compared to 1,090 tons in the first three months of 2014, the industry group said in its Gold Demand Trends report.
"This broadly stable global picture belies regional and sector differences," said Alistair Hewitt, head of market intelligence at the World Gold Council.
Jewelry purchases--a key signifier of demand--was down 3% in the first quarter from a year earlier, at 601 tons. Bar and coin investment also came under pressure, as stronger stock markets in India and China lured some investors away from gold, and as Turkey and Japan saw selloffs in the metal. Global investment demand fell 10% from a year earlier to 253 tons. However, Europe saw a 16% surge in demand for bars and coins to 61 tons amid economic uncertainty in the region.
China and India--the two biggest users of the precious metal, accounting for more than half of all consumption--told different demand stories. Demand for gold in China fell 7% to 273 tons from a year before, as cooling economic growth, restrained buying during the Lunar New Year, and price caution among bargain hunters curbed consumer appetite, the World Gold Council said. The decline in gold purchases was led by a drop in demand for gold jewelry, which dropped 10% to 213 tons.
In India, the removal of government restrictions on gold imports and an overall sense of "economic optimism" triggered buying, Mr. Hewitt said. Total demand rose 15% in the first quarter to 192 tons, and jewelry purchases rose 22% to 151 tons.
Looking into the second quarter, India's Akshaya Tritiya festival in April has likely boosted demand, while China resumed its purchases, the World Gold Council said. The price of gold traded in New York has fallen 6.4% from its Jan. 22 settlement peak of $1,300.70 a troy ounce, which helped encourage demand.
For the full year, the World Gold Council predicts that global demand for the metal will total between 4,200 tons and 4,300 tons, up from last year's 3,924 tons.