World Gold Council reports on 2018 gold activity

By Paul Gilkes

Published: Feb 5, 2019, 3 AM

2018 experienced increased buying of gold bars and coins globally over 2017 levels.

Image courtesy of London Bullion Market Association.

Annual demand for gold increased 4.5 percent in 2018, stoked by the highest buying of precious metal by central banks in five decades, says the World Gold Council.

According to a WGC report released Jan. 31, 2019, gold demand reached 4,345.1 metric tons, up from 4,159.9 metric tons in 2017, in line with a five-year average of 4,347.5 metric tons. Yearly demand was assisted by an influx of 112.4 metric tons of the metal held in exchange-traded funds during the fourth quarter of 2018. However, annual EFT activity for 2018, at 68.9 metric tons, dropped 67 percent from 2017's 206.4 metric tons, according to the WGC.

The total gold supply was up slightly in 2018, to 4,490 metric tons, bolstered by record mine production and increased recycling of scrap. Mine production hit a new record high of 3,347 metric tons in 2018 while recycling returned to historic norms during the year, totaling 1,173 metric tons.

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Gold bar and coin investment increased 4 percent globally in 2018 reaching 1,090.2 metric tons, from the 1,045.2 metric tons recorded in 2017.

“Bar sales were steady at 781.6 metric tons,” according to the WGC. “Bar demand has been remarkably stable over the past five years with annual demand anchored between a low of 780 metric tons in 2014 and a high of 797 metric tons in 2016. The official coin market, however, saw annual demand surge 26 percent to 236 metric tons, the second highest level on record — the previous high was 270.9 metric tons in 2013.”

According to the WGC analysis, “Coin demand flourished in a few countries, most notably Iran and South Africa, where retail investor concerns around stock market volatility, currency weakness and geopolitical uncertainty were common themes.”

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