The market analyst released its ‘2018 Precious Metals Review' Thursday, saying it expected 2018 to be another year of net de-hedging, albeit at a forecast 29 tonnes, 29% lower than in 2017.
Net physical demand is expected to total 3783t, 5% lower year-on-year.
On final analysis, the net physical surplus was forecast to reach 745t in 2018, compared with 257t in 2017, Refinitiv said.
Jewellery consumption is expected to pull back modestly by about 4% year-on-year, driven by lower consumption in key markets such as India.
Industrial fabrication demand is likely to rise by 0.4% this year to an estimated 380t. Refinitiv said the rise in demand had been apparent in the electronics sector at 0.8%, or 278t - a record high. This was the second consecutive yearly increase in this sector.
The net official sector demand is expected to increase by almost 23% to 450t, given the backdrop of a global trade war, ongoing US sanctions, rising yields and a strengthening dollar.
Refinitiv said it was "unsurprising" that central banks were looking to increase their safe haven exposure in the form of gold while reducing their exposure to foreign exchange reserves.
Emerging markets, particularly those that have recorded muted transactions this century, have increased their purchases this year.
Retail investment (coin and bullion) demand was expected to decline by more than 11% in 2018, as other higher performing assets had taken market share, the analyst found.
Coin demand struggled in the first half of this year, but is expected to rise by 9% this year to 269t.
Meanwhile, exchange-traded funds inventory build-up contracted during 2018 after two consecutive years of buying.
"We forecast net outflows this year of 23t. This appeared to be the result of funds being redirected to higher yielding assets," Refinitiv said.
Meanwhile, Refinitiv flagged the US/China trade war as the "big event" of this year, having little positive impact on price and pushing it below the US$1200/oz level, after gold traded above $1300/oz in the first two quarters.
The analyst said the recent "truce" between China and the US might drive the dollar down and be beneficial to gold, but the current interest rate increase timetable could weigh on the price upside.