Global gold demand slows in first half of 2017

By Dilara Zengin

ANKARA (AA) - Global demand for gold decreased in the first half of 2017, the World Gold Council announced on Thursday.

Global gold demand fell by 14 percent in the first half of this year compared with the same period last year, according to the council's new report. Demand reached 2,003.8 tons

The World Gold Council said demand from gold-backed exchange-traded funds decreased dramatically to 167.9 tons during this period compared to the first half of 2016.

Central Banks' demand for gold continued at a modest pace, according to the council. The banks purchased 176.7 tons of gold in the first half of 2017, marking 3 percent decrease compare to first half of 2016.

Investment in gold bars and coins, by contrast, improved, the World Gold Council underlined.

Demand for gold bars and coins rose by 11 percent yearly in the first half of 2017, it added.

The council noted that demand for jewelry grew 5 percent to 967.4 tons in the first half of 2017 compare to the same period of last year.

Meanwhile, in Turkey, jewelry demand was up 20 percent year-on-year in the second quarter of 2017, the council's report showed.

"After lira prices had reached record levels in March, the drop sent a strong signal to consumers to buy, particularly as the wedding season approached. Demand has been underpinned by continued support from the Turkish government, albeit support that has focused on gold as an investment," it explained.

The value of Turkish lira strengthened against the US dollar and it led to a dip in the local gold price in early April.

The price of gold per kilogram stood at 144,000 Turkish liras (some $40.654) as of 12.30 p.m. (0930GMT) on Thursday.

"The improving economy, inflation edging higher, and a strengthening local currency coincided with a near 9 percent drop in the local gold price between April and May. Investors took advantage of this to increase their gold holdings," it said.

Turkey's Central Bank also purchased 21 tons of gold in the second quarter of 2017, according to the World Gold Council.

"We understand the decision to increase holdings was strategic, reflecting Turkey’s commitment to gold as a key reserve asset," it added.