Global gold demand in 2018 was up 4%, boosted by the highest central bank buying in 50 years, though jewellery demand, which accounts for just over 50% of total demand was virtually stable, according to the Gold Demand Trends (Full Year and Q4 2018) released by the World Gold Council last week.

At 4,345.1 tonnes, global demand was not only higher than the 4,159.9 t recorded last year, but also in line with the five-year average of 4,347.5 t, WGC added.

The report said that central bank purchases soared to 651.5 tonnes during the year, the second highest yearly purchase on record, up 276.7 t as compared to a year ago. On the other hand, jewellery demand was recorded at 2,200 tonnes, just 1 t below last year’s level.

Jewellery demand was soft in Q4 (down 3% to 636.2 t), as the recovery in China stalled in Q4, with slowing economicgrowth and trade frictions denting consumer sentiment and demand in the Middle East remained weak.

However, China was still the major driver of growth during the year, with 2018 demand up 3% to a three-year high of 672.5 t.

Annual Indian gold jewellery demand weakened marginally to 598 t, from 601.9 t in 2017. Q4 demand was also fractionally lower y-o-y (180.1 t v. 182.4 t), as consumers showed caution in the face of high and volatile local gold prices.

The US recorded its second year of growth with jewellerydemand rising to 128.4 t, up 4% y-o-y and the highest level since 2009.However, thepace slowed in Q4, though it was, nevertheless, the eighth consecutive quarter of y-o-y growth with demand of 48.1 t, also the highest since Q4 2009.

In the Middle East. economic hardship, relatively weak currencies and the after effects of tax-changes affected Turkey and Middle Eastern markets to varying degrees: Iran and Turkey were hit particularly hard.