Britain’s referendum and their vote to leave the European Union, together with the United States elections which led to the victory of now president Donald Trump, pushed investors towards investing in gold. The price of the yellow shiny metal reached its highest level of the last three years during 2016 given the demand shown by pension and UCITS funds.

According to the World Gold Council and its Gold Demand Trends report published on Friday, demand for gold during 2016 increased by 2% to a three-year high of 4,308.7 tonnes. In contrast, jewellery purchases declined as well as purchases by central banks. The same report highlighted that the main reason for the increase in gold demand was a rise in appetite by Exchange Traded Funds (ETFs) as overall investment during last year was for 531.9 tonnes.

Investors have been traditionally turning towards gold during times of economic and political uncertainty. And it is fair to say that 2016 was a year of turmoil due to the unexpected result of the UK referendum for Brexit, and the equally surprising election of Donald Trump as U.S. president. Very low interest rates maintained by Central Banks and the weak yuan are also contributing to the increased demand for gold.

But the increase in gold prices caused as a chain effect an increase in prices for jewellery and so sales during 2016 fell to their lowest level in seven years at 2,041.6 tonnes. Increases in foreign exchange reserves by Central Banks reduced their exposure and purchases in gold. Purchases in India and China, the two biggest gold markets in the world, declined as gold prices soared during the first three quarters of 2016. Q4 2016 gold prices subsequently decreased but they nevertheless recorded an 8% annual increase.

India’s gold industry took a blow at the beginning of 2016 as jewellers went on strike while during the later parts of the year many parts of the country were negatively affected by the cash crunch and the withdrawal of high value bank notes. Economists however remain optimistic about the local gold market as the good monsoon increased farming production which in turn could allow consumers to buy more gold.