Total gold demand in the second quarter of 2024 reached 1,258 metric tons, an increase of 4% over the second quarter of last year. The World Gold Council’s latest Gold Demand Trends report reveals that this demand was the strongest for a second quarter since 2000.
Gold Prices High
Gold prices reached a record of $2,427 per ounce in the second quarter due to continued over-the-counter purchases, central banks’ gold purchases, and a slowdown in exchange-traded fund outflows later in the quarter.
Despite the high gold price, it was noted that the OTC market has shown continued appetite for gold from various investors. Conversely, demand for jewelry fell last quarter as prices continued to rise, prompting some retail investors to take profit.
Gold Demand Outlook
The World Gold Council reported a 6% decrease in gold demand when excluding OTC figures. However, looking ahead, analysts are considering potential catalysts to keep gold in the spotlight of investment strategies.
The recent announcement of an import duty cut in India is expected to enhance gold demand in the region, where high prices have been deterring consumer purchases. This change, along with global market shifts, should support and elevate gold demand in the coming months.
July Gold Prices
In July and early August, gold prices continued to perform well. Factors such as lower 10-year Treasury yields and a weaker U.S. dollar contributed to driving gold prices higher. However, a modest decline was observed toward the end of the month.
Gold Demand Trends
Central banks and official institutions increased global gold holdings by 183 metric tons in the second quarter, reflecting a 6% year-on-year increase. The report also highlights a belief among reserve managers that gold allocations will continue to rise for portfolio protection and diversification.
Gold investment remained resilient globally, with divergent demand trends. Gold bar and coin investment dropped due to decreased coin demand from Western markets, although strong retail investment in Asia was noted.
Global gold ETFs saw minor outflows in the second quarter, with varying trends across regions. Jewelry demand decreased due to high gold prices, while demand for gold in technology and electronics sectors increased significantly over the previous year.
Despite an increase in total gold supply, mining costs continued to rise, driven by inflationary pressures since 2020. Recycled gold volume also saw an increase, marking the highest second quarter volume since 2021.
