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Informist, Tuesday, Jul 30, 2024

 

--WGC: Global gold demand in Apr-Jun at 1,258.2 tn, up 4% on year

--CONTEXT: WGC releases Gold Demand Trends report for Apr-Jun

--WGC: Global gold invest demand in Apr-Jun at 253.9 tn, up 1% on yr

--WGC: Apr-Jun global demand for gold bars, coins at 261 tn, down 5%

--WGC: Global gold ETF outflow at 7.2 tn Apr-Jun vs 21.1 tn year ago

--WGC:Global gold demand for jewellery in Apr-Jun at 390.6 tn, dn 19%

--WGC: Central banks bought 183.4 tn gold in Apr-Jun, up 6% on year

--WGC: Global gold supply in Apr-Jun 1,258.2 tn vs 1,207.9 tn yr ago

--WGC: Average gold price in Apr-Jun at $2,338.2/oz, up 18% on year

MUMBAI – In the June quarter, demand for gold worldwide was at its highest for the period since 2000, supported by healthy over-the-counter transactions, the World Gold Council said. Global demand for gold rose 4% on year to 1,258.2 tn in Apr-Jun, WGC said in its Gold Demand Trends report released today. 

 

"Estimating and attributing OTC investment buying is difficult due to its opaque nature, but field research strongly supports the data available that puts this at 329 tn – the strongest quarter since Oct-Dec 2020," it said. However, excluding demand from the over-the-counter market, global gold demand fell nearly 6.5% on year to 929 tn in the June quarter from 993.1 tn in the year-ago period.

 

Globally, gold demand for jewellery fell 19% to 390.6 tn in Apr-Jun. During an extraordinary quarter in which gold price set a series of successive record highs, jewellery demand responded, unsurprisingly, with a sharp drop led by China and India, WGC said.

 

It added that this was the weakest second quarter since 2020, when jewellery demand felt the impact of the COVID-19 pandemic. In value terms, jewellery demand in Apr-Jun was $29 bln, 4% lower on year as the sharp rise in gold prices did not quite compensate for the decline in volumes.

 

Total jewellery demand in China plunged 35% to 86.3 tn in the June quarter, as record gold prices and slowing economic growth weighed on consumer sentiment. "The second half of the year holds limited prospects for an uptick in gold jewellery demand. While seasonal strength in Oct-Dec should provide support, consumer sentiment is likely to remain fragile until clear signs of economic improvement emerge," the report said.

 

Demand for bars and coins fell 5% on year to 261 tn in Apr-Jun, while total investment demand for the yellow metal rose 1% to 253.9 tn. "Bar and coin buying strengthened across Asia as investors were attracted by the high price and currency depreciation highlighted gold's wealth protection role. This strong Asian retail investment was counterbalanced by far lower levels of net demand in Western markets, where profit-taking/liquidation surged – notably in Europe," WGC said.

 

Outflows from global gold exchange traded funds narrowed to 7.2 tn in Apr-Jun from 21.1 tn in the same period last year. Sizeable early outflows were followed by nascent inflows.

 

In Apr-Jun, demand for gold from central banks was up 6% on year at 183.4 tn, driven by the need for portfolio protection and diversification, the council said. "Combined with (Jan-Mar) Q1 net purchases, central bank gold demand in Jan-Jun totalled 483 tn, the highest first half year in our data series," WGC said.

 

"The rising and record-breaking gold price has made headlines as strong demand from central banks and the OTC market supported prices, which has been a consistent trend throughout the year," said Louise Street, senior market analyst at WGC.

 

In the June quarter, gold prices averaged $2,338.2 an ounce, a record high. This was 18% higher on year and 13% higher than in the March quarter. The price of the yellow metal hit a new record of $2,427 per oz in May. "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," Street said.

 

SUPPLY

Globally, supply of gold was up 4% on year at 1,258.2 tn in Apr-Jun, led by strong mine production and an increase in recycling. For Jan-Jun, supply of gold increased 1% on year to 2,441.1 tn, driven by 2% growth in mine production to a record level.

 

During the quarter, production from mines rose 3% on year to 929.1 tn, the strongest second quarter since 2000, beating the previous record of 900 tn set last year.

 

Meanwhile, record high gold prices triggered a modest on-year increase in recycling supply, though it fell sequentially. The supply of recycled gold rose 4% on year to 335.4 tn in Apr-Jun, the data showed. "Divergent performance of major economies will probably make the outlook for recycling supply as nuanced in coming quarters as has been the case recently, but it is worth reiterating that absolute levels of recycling supply, although recently increased, are far below the highs seen during the Global Financial Crisis and have yet to exceed levels reached during the pandemic," WGC said.  End

 

US$1 = 83.73 rupees

 

Reported by Sandeep Sinha

Edited by Avishek Dutta

 

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