{"id":6992,"date":"2024-07-30T21:43:00","date_gmt":"2024-07-30T21:43:00","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/30\/golds-record-q2-fueled-by-rise-in-otc-investment-and-strong-central-bank-buying\/"},"modified":"2024-07-30T21:43:00","modified_gmt":"2024-07-30T21:43:00","slug":"golds-record-q2-fueled-by-rise-in-otc-investment-and-strong-central-bank-buying","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/30\/golds-record-q2-fueled-by-rise-in-otc-investment-and-strong-central-bank-buying\/","title":{"rendered":"Gold\u2019s Record Q2 Fueled by Rise in OTC Investment and Strong Central Bank Buying"},"content":{"rendered":"

The World Gold Council\u2019s (WGC) latest Gold Demand Trends report reveals that <\/strong>robust over-the-counter (OTC) investment offset declines in jewelry demand, as well as retail bar and coin demand, in the second quarter. <\/strong><\/p>\n

Continued central bank buying was also a key reason why the yellow metal achieved record highs in Q2. <\/p>\n

Gold demand excluding OTC decreased by 6 percent year-on-year in Q2 to reach 929 metric tons (MT). This decline was primarily driven by a drop in jewelry consumption, which fell by 19 percent year-on-year to a four year low of 391 MT. <\/p>\n

However, when OTC investments are included, total gold demand increased by 4 percent year-on-year to come in at 1,258 MT, marking the highest Q2 amount in the WGC\u2019s data series, which dates back to 2000.<\/p>\n

Central bank net gold buying showed a positive trend, rising by 6 percent year-on-year to 184 MT. This increase reflects central banks\u2019 ongoing need for portfolio protection and diversification in the face of economic uncertainties.<\/p>\n

The WGC report also notes a minor 7 MT decline in global gold exchange-traded fund (ETF) holdings, which compares favorably to the 21 MT drop in seen in the second quarter of 2023. Meanwhile, retail bar and coin investment was down 5 percent year-on-year to 261 MT, largely due to weak demand in western markets.<\/p>\n

In contrast, gold used in technology saw an 11 percent year-on-year increase, driven by the continued growth in the artificial intelligence (AI) sector, along with high-performance computing needs. <\/p>\n

The WGC notes that the London Bullion Market Association average gold price reached a record of US$2,338 per ounce in Q2, an 18 percent increase year-on-year and a 13 percent rise quarter-on-quarter.<\/p>\n

Gold peaked at US$2,427 in May, with the surge in price being driven by OTC investment of 329 MT \u2014 highlighting a strategic shift toward gold as a hedge against market volatility and geopolitical risks.<\/p>\n

Total gold supply grew by 4 percent year-on-year in Q2 to 1,258 MT, with mine output reaching a record 929 MT for a second quarter. Recycling supply was the highest for a second quarter since 2012, responding well to the higher prices.<\/p>\n

Meanwhile, regional investment trends diverged, with robust demand for bars, coins and ETFs in the east contrasted by a marked decline in the west. Western ETF investment flows have started to return in Q3, indicating a potential shift.<\/p>\n

Looking ahead, the WGC suggests a cautiously optimistic outlook for the second half of 2024. While western investment demand is expected to produce a positive H2, the full-year estimate has been slightly lowered due to a disappointing Q2 for ETFs. OTC investment is likely to continue its significant contribution, as seen in the first half of the year.<\/p>\n

Jewelry demand may take time to adjust to higher prices, with India potentially being a bright spot due to recent duty cuts and a healthy macroeconomic backdrop. AI is expected to continue driving technology demand for gold in H2.<\/p>\n

Potential downside risks for gold in the second half of the year include a pullback in central bank buying and weaker retail investment in emerging markets. On the upside, a more substantial economic slowdown in developed markets and increased geopolitical uncertainty could bolster interest in gold investment products.<\/p>\n

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

The World Gold Council\u2019s (WGC) latest Gold Demand Trends report reveals that robust over-the-counter (OTC) investment offset declines in jewelry demand, as well as retail bar and coin demand, in the second quarter. Continued central bank buying was also a key reason why the yellow metal achieved record highs in Q2. Gold demand excluding OTC […]<\/p>\n","protected":false},"author":0,"featured_media":6993,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-6992","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=6992"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6992\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/6993"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=6992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=6992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=6992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}