Gold Demand Surged to Hit Three-Year Peak in H1 2019

SEATTLE (Scrap Monster): The Gold Demand Trends Report for Q2 2019 published by the World Gold Council (WGC) states that demand for gold in the first half of the current year hit three-year highs, mainly on account of record-breaking central bank purchases. The ETF inflows also contributed to the HI gold demand.

According to WGC, central banks around the globe added 224.4 tonnes (t) of gold to its reserves during the second quarter of the year, thus taking the total H1 purchases to 374.1t. The central banks in emerging markets recorded increased buying activity. Meantime, the holdings in gold-backed ETFs witnessed growth of 67.2t in Q2 this year, taking the total holdings to 2,548t. The continued geopolitical instability, lower interest rate expectations and spiraling gold prices triggered the inflows.

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However, the bar and coin investment tanked to a ten-year low of 476.9t during the initial six-month period of the year. The investment plunged by nearly 12% to 218.6t in Q2 this year, mainly on account of 29% decline in Chinese investment.

The gold jewellery demand surged higher by 12% in the second quarter of 2019 to 168.8t, mainly driven by India. The Indian demand resulted in 2% year-on-year jump in global jewellery demand in H1, which totaled 531.7t. The higher number of auspicious days for wedding boosted the wedding season demand. The country also recorded robust gold jewellery sales during the festive seasons, including Akshaya Tritiya.

The WGC Report notes that H1 gold supply touched 2,323.9t- the highest level since 2016. The supply recorded 6% growth in Q2 this year.