The WGC said ETFs recorded their first net quarterly outflow since mid-2007 in the first three months of the year, with overall holdings of the products -- which issue securities backed by physical gold -- falling by 55.9 tonnes. Total coin and bar demand rose by 52 percent or 125.5 tonnes to 366.4 tonnes in the first quarter. Gold investment increased by 26 percent in tonnage terms to 310.5 tonnes, helping raise total bullion demand to 981.3 tonnes from 881 tonnes.
Eily Ong, research manager for the industry-funded WGC, said she expected this trend to persist throughout the year. "We have had geopolitical unrest in the Middle East/North Africa region, the ongoing uncertainty and concern about sovereign debt issues (in Europe), and continuing global inflationary fears around the world," she said.
"In China and India, they are still trying to hike interest rates to combat inflation," she said. "All these provide a very suitable environment (for gold investment)." --- read more
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