Gold Demand Remains Flat as Central Banks Continue Buying

Global gold demand remained flat in the second quarter of this year, according to the World Gold Council (WGC) report. The total gold demand for April-June stood at 1,269 tonnes, which is almost unchanged from 1,268.6 tonnes a year earlier. This is despite softer prices moderating investment demand after the record rally earlier in the year.

The WGC said that investment in gold exchange-traded funds (ETFs), bars, and coins fell to 262 tonnes during the quarter as lower gold prices eased the strong investment momentum seen earlier in the year. The decline was largely driven by 45 tonnes of outflows from gold-backed ETFs between April and June.

Central banks continued to add to their gold reserves, purchasing a net 289 tonnes during the April-June quarter, a 62% increase from a year ago. Buying was led by countries including Poland, China, and the Czech Republic. The Reserve Bank of India (RBI) also added 200 kg during the quarter.

The WGC's report said that high gold prices continued to weigh on jewellery demand, which fell 17% year-on-year in volume terms during the quarter as consumers bought less gold and shifted towards lighter products. However, the value of jewellery demand remained strong, rising 22% year-on-year to USD 86 billion.