MUMBAI, July 30:Global gold demand increased 4.16 per cent during the April-June period to 1,258.2 tonnes, mainly driven by healthy over-the-counter (OTC) transactions, making it the strongest second quarter of a calendar year, World Gold Council (WGC) said in a report on Tuesday.
During the second quarter of 2023, the total demand stood at 1,207.9 tonnes, WGC’s ‘Q2 2024 Gold Demand Trends’ report has revealed.
According to the data, the demand was supported by healthy OTC transactions, up 53 per cent year-on-year at 329 tonnes, during the June quarter.
Simultaneously, the quarter under review also witnessed an 18 per cent year-on-year growth in gold prices that averaged USD 2,338 an ounce, reaching a record of USD 2,427 an ounce during the quarter, said the report.
Increased OTC demand, continued buying from central banks, and a slowdown in ETF outflows drove record-high gold prices in the second quarter this year, it added.
It further said, Central banks and official institutions increased global gold holdings by 183 tonnes, slowing down from the previous quarter but still reflecting a 6 per cent increase year-on-year.
“Our annual central bank survey confirmed that reserve managers believe gold allocations will continue to rise over the next 12 months, driven by the need for portfolio protection and diversification in a complex economic and geopolitical environment,” said the report.
It further said the global gold investment remained resilient, marginally higher year-on-year at 254 tonnes, concealing divergent demand trends.
Bar and coin investment decreased 5 per cent to 261 tonnes in the April-June period, due to a sharp decline in demand for gold coins.
Strong retail investment in Asia was counterbalanced by lower levels of net demand in Europe and North America, where profit-taking surged in some markets, it added.
Meanwhile, the report revealed that global gold ETFs (exchange-traded funds) saw minor outflows of 7 tonnes during the quarter.
Asian growth continued, sizable European outflows in April turned into nascent inflows in May and June, and North American outflows slowed significantly compared to the previous quarter, it said.
Record high prices drove down jewellery demand by 19 per cent year-on-year in the second quarter, but during the first half of this year (January-June) demand remained resilient compared to the same period last year, mainly due to a stronger-than-expected first quarter, it added.
In addition, demand for gold in technology continued to increase, jumping 11 per cent year-on-year, driven primarily by the AI boom in the electronics sector, which saw a 14 per cent increase year-on-year.
Total gold supply also went up 4 per cent, with mine production increasing to 929 tonnes.
Recycled gold volumes increased 4 per cent, marking the highest second quarter since 2012.
WGC Senior Markets Analyst Louise Street said the rising and record-breaking gold price made headlines as strong demand from central banks and the OTC market supported prices.
“The OTC market has seen continued appetite for gold from institutional and high-net-worth investors, as well as family offices, as they turn to gold for portfolio diversification. On the other hand, demand from jewellery tumbled last quarter as prices continued to hit highs, which also tempted some retail investors to take profit,” she said.
“While there are potential headwinds for gold ahead, there are also changes taking place in the global market that should support and elevate gold demand,” she added. (PTI)
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