In its gold demand trends for the second quarter of 2024, the World Gold Council reveals over-the-counter (OTC) investments were the main driver for gold’s demand, yielding a 53% year-on-year increase.
Excluding OTC investments, the gold demand was in fact down 6% year-on-year, as a sharp decrease in jewellery consumption outweighed mild gains in all other sectors.
The World Gold Council says adding in OTC investment to total gold demand brings a 4% increase to 1,258 tonnes — which is the highest second quarter the council’s data series has seen, dating back to 2000.
Investment firm Saxo Bank’s Head of Commodity Strategy Ole Hansen says demand from a range of sources kept gold supported.
“The organisation saw record demand with OTC investment demand from family offices and rich individuals as well as continued demand from central banks as being decisive,” Hansen says.
The London Bullion Market Association (LBMA) gold price averaged a record US$2,338 per ounce during the June quarter, representing an 18% increase year-on-year and 13% compared to the previous quarter.
Gold reached a record of US$2,427 per ounce in May, as this news service previously reported.
Saxo says gold reached a record just below US$2,500 — which is the firm’s end-of-year target — after traders, following a succession of weaker US economic data print, lifted expectations a US rate cutting cycle could begin in September as opposed to a prior focus on December as the starting point.
“Lower funding costs for holding a position in a non-interest paying metal, such as gold, will increase its attractiveness, and during July we have seen some early signs that interest rate-sensitive investors have started to warm up to gold, with the total holdings across the major exchange-traded funds showing the biggest monthly increase since March 2022 when total holdings peaked above 3,200 tonnes, only to suffer months of net selling amid rapid rising US interest rates,” Hansen says.
Write to Aaliyah Rogan at Mining.com.au
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