The World Gold Council’s Q2 2024 Gold Demand Trends report highlights a notable 4% year-on-year (YoY) rise in global gold demand, reaching 1,258 tonnes, marking the strongest second quarter recorded in their data series.
Key drivers behind this surge include a significant 53% increase in over-the-counter (OTC) transactions, which hit 329 tonnes. The report also attributes the demand spike to sustained central bank purchases and a slowdown in ETF outflows, leading to record-high gold prices. The average gold price in Q2 was $2,338 per ounce, an 18% increase YoY, peaking at $2,427 per ounce.
Central Bank Activities and Investment Trends
Central banks and official institutions increased their gold holdings by 183 tonnes, reflecting a 6% YoY increase. The World Gold Council's survey suggests that reserve managers expect further increases in gold allocations for portfolio protection and diversification amid complex economic and geopolitical conditions.
Despite mixed trends in demand, global gold investment saw a marginal rise to 254 tonnes. Bar and coin investment decreased by 5% to 261 tonnes due to lower demand for gold coins, while strong retail investment in Asia offset weaker demand in Europe and North America. Global gold ETFs saw minor outflows of seven tonnes during the quarter.
Impact on Jewellery and Technology Sectors
Record high gold prices led to a 19% YoY decline in jewellery demand in Q2, although the first half of the year remained resilient due to a stronger-than-expected first quarter. Gold demand in technology grew by 11% YoY, driven by the AI boom in the electronics sector, which saw a 14% increase.
Supply Dynamics
Total gold supply increased by 4% YoY, with mine production rising to 929 tonnes. Recycled gold volumes also rose by 4%, marking the highest second quarter since 2012.
UAE Market Performance
The UAE market mirrored global trends, with investment demand dropping by 5% and jewellery demand decreasing by 13% YoY. According to Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council, future regional demand will be influenced by economic conditions and investor sentiment, with the high gold price likely to remain a challenge.
News Source: Gulf Business
