Central banks and official establishments additionally elevated international gold holdings by 183 tonnes, a slower price than the earlier quarter however nonetheless reflecting a 6% enhance year-on-year.
The surge in OTC demand and continued shopping for from central banks, plus a slowdown in ETF outflows, helped drive gold costs to a report $2,427/oz. in the course of the quarter. Gold averaged $2,338/oz. for the three-month interval, 18% greater year-on-year.
The WGC central financial institution survey confirmed that reserve managers imagine gold allocations will proceed to rise over the subsequent 12 months, pushed by the necessity for portfolio safety and diversification in a fancy financial and geopolitical surroundings.
“The rising and record-breaking gold worth has made headlines as sturdy demand from central banks and the OTC market supported costs, which has been a constant development all year long,” Louise Avenue, senior markets analyst on the WGC stated within the report.
Demand breakdown
World gold funding remained resilient throughout Q2, marginally greater year-on-year at 254 tonnes, concealing divergent demand traits. Bar and coin funding decreased 5% to 261 tonnes, as a result of a pointy decline in demand for gold cash.
Robust retail funding in Asia was counterbalanced by decrease ranges of web demand in Europe and North America, the place profit-taking surged in some markets, WGC stated.
World gold ETFs noticed minor outflows of seven tonnes in the course of the quarter. Asian development continued, sizable European outflows in April changed into nascent inflows in Might and June, and North American outflows slowed considerably in comparison with the earlier quarter.
File excessive costs drove down jewelry demand by 19% year-on-year in Q2, however H1 demand stays resilient in comparison with the identical interval final yr, due to a stronger-than-expected first quarter.
As well as, demand for gold in expertise continued to extend, leaping 11% year-on-year pushed primarily by the AI increase within the electronics sector which noticed a rise of 14% year-on-year.
In the meantime, gold provide rose 4% year-on-year, with mine manufacturing growing to 929 tonnes. Recycled gold volumes elevated 4% in comparison with the identical quarter in 2023, marking the best second quarter since 2012.
Outlook
Wanting forward, the query is: “What would be the catalyst to maintain gold entrance and centre in funding methods?” Avenue stated.
“With a long-awaited price reduce from the US Consumed the horizon, inflows into gold ETFs have elevated due to renewed curiosity from Western buyers. A sustained revival of funding from this group may change demand dynamics within the second half of 2024.
“In India, the not too long ago introduced import obligation reduce ought to create optimistic circumstances for gold demand, the place excessive costs have hampered shopper shopping for,” she famous.
“Whereas there are potential headwinds for gold forward, there are additionally adjustments happening within the international market that ought to help and elevate gold demand.”
For the total report, click on right here.