World Gold Council: Gold sees firm demand despite market fluctuations

The World Gold Council has recently released the Q2 2024 Gold Demand Trends report, showcasing a 4% year-on-year increase in total global gold demand to 1,258t, marking the strongest second quarter in over 30 years of data tracking. The report highlights key trends that are shaping the gold market landscape and emphasizes the significant role gold is playing in the financial markets worldwide. Market Strategist from the World Gold Council, Joe Cavatoni, discussed the report's key highlights in a recent CNBC Africa interview, highlighting the shift in investor focus from the East to the West and the emerging prominence of gold in investment portfolios. He noted that while there has been a slight consumer slowdown, strong support from central banks and increasing interest from global investors are expected to continue driving the demand for gold upwards. One of the key factors contributing to the sustainability of gold in the long term is the evolving role of gold in portfolios, particularly in the eastern markets such as China, India, and the Asia-Pacific region. The trend of incorporating gold into investment portfolios, along with the shifting monetary policies and the anticipation of rate cuts, is expected to propel gold prices higher. Cavatoni highlighted the growing demand for gold ETFs in the US and Europe, indicating a shift from outflows to inflows, which is anticipated to drive positive demand trends in the second half of the year. Moreover, the discussion also touched upon the impact of technology on gold demand, with the technological sector accounting for about 7% of global gold demand. Despite price fluctuations, the technology industry has shown consistent growth in gold consumption, particularly in electronics and supercomputing applications. The jewelry market, on the other hand, experienced a slowdown in the second quarter due to record high gold prices, but it remains a crucial component of global investment portfolios. In terms of supply, there has been a four-year-on-year increase in gold supply, with mine production showing a significant uptick. The mining sector is on track to set production records, indicating strong performance and efficient production management. The balance between production and recycling is vital, with recycling playing a crucial role in maintaining adequate supply levels, especially during periods of high gold prices. Central banks continue to play a pivotal role in gold consumption, particularly in emerging markets, while the focus remains on meeting the ongoing demand for gold in various sectors. The discussion also touched on the significance of gold recycling, highlighting the growing trend of end-of-life cycle gold recycling and the utilization of recyclables to extract additional gold, underscoring the importance of sustainability and resource efficiency in the gold industry. Overall, the Q2 2024 Gold Demand Trends report indicates a positive outlook for the gold market, driven by strong global demand, evolving investor preferences, and increasing applications of gold across various sectors. As gold continues to hold its allure as a valuable asset and a diversification tool in investment portfolios, the future looks promising for this precious metal.