Gold’s demand in Pakistan during the second quarter of 2016 grew 16.3% on a year-on-year basis, according to the latest statistics released by the World Gold Council (WGC).
The amount of gold purchased directly by individuals in Pakistan in April-June was 10.7 tonnes, which reflects an increase of 10.3% over the total consumer demand of 9.7 tonnes recorded in the preceding quarter (January-March).
Consumer demand of gold consists of two major categories: jewellery demand and bar/coin demand. The increase in gold jewellery demand in Pakistan outpaced the rise in the demand for gold bars and coins in April-June, WSG data shows.
Gold jewellery demand during the last quarter remained 6.5 tonnes, up 20.3% from April-June 2015. In contrast, the demand for gold bars and coins equalled 4.2 tonnes, up 10.5% from a year ago.
Pakistan’s share in the global consumer demand for gold is miniscule. With world consumer demand at 655.7 tonnes, Pakistan’s share was a little over 1.6% in April-June.
Unlike Pakistan, consumer demand for gold remained subdued in India during the three-month period under review. Jewellery demand dropped almost 20% in the neighbouring country year-on-year while the demand for bars and coins was down about 12% in April-June.
In fact, consumer demand for gold witnessed subdued growth globally in the second quarter of 2016. Global jewellery demand dropped almost 14% on an annual basis while demand for bars and coins remained largely flat in April-June, WGC data shows.
However, suppressed jewellery demand for gold in April-June was overshadowed by a massive surge in the demand for the yellow metal for investment purposes.
“Investment was the largest component of gold demand for two consecutive quarters – the first time this has ever happened,” WGC said in its commentary on the latest data. It said investment demand (1,064 tonnes) accounted for almost half of overall gold demand during the first six months of 2016. “Western investors generated the bulk of this investment,” it added.
With its price surging almost 28% in the international market since January 1, gold has outperformed nearly all asset classes so far in 2016.
International gold prices had dipped 11% in 2015. But the investment outlook changed in 2016, thanks to unforeseen events in the global economy. With the exit of Britain from the European Union along with the continued reluctance of the US Federal Reserve to increase its key interest rate, investors are rushing to park their assets in “safe havens” like gold, analysts say.
Gold traded at Rs52,950 per tola (11.6 grams) on Friday, according to All Sindh Saraf and Jewellers Association, up 19.5% from the beginning of 2016 when the per-tola price was Rs44,300.
