Gold demand trends for Q2-2024

The World Gold Council notes that gold demand was firm and record prices prevailed in Q2-2024. OTC investment and central banks remained decisive

Personal Finance / opinion

The World Gold Council notes that gold demand was firm and record prices prevailed in Q2-2024. OTC investment and central banks remained decisive

3rd Aug 24, 10:23am by Guest

Gold demand excluding OTC in Q2 was down 6% y/y to 929t as a sharp decline in jewellery consumption outweighed mild gains in all other sectors. Adding in OTC investment to total gold demand yields a 4% y/y increase to 1,258t – the highest Q2 in our data series back to 2000.

The record gold price environment took its toll on Q2 jewellery consumption: volumes fell 19% y/y to a four-year low of 391t.

Central bank net gold buying was 6% higher y/y at 184t, driven by the need for portfolio protection and diversification.

A minor 7t decline in global gold ETF holdings in Q2 compared positively with the 21t drop in Q2’23. Sizable early outflows were followed by nascent later inflows.

Retail bar and coin investment was 5% lower at 261t, primarily due to weak demand from Western markets.

Gold used in technology jumped 11% y/y, as the AI trend continued to drive demand in the sector.

Highlights

The LBMA (PM) gold price averaged a record US$2,338/oz in Q2 – 18% higher y/y and 13% higher q/q. Gold reached a new record of US$2,427/oz in May.
OTC investment of 329t was a significant component of Q2 total gold demand. Together with continued central bank buying, it helped drive the price to a series of record highs during the quarter.
Total gold supply grew by 4% y/y to 1,258t. Mine production of 929t was a record for a second quarter. Recycling supply was the highest for a second quarter since 2012, responding to the rising gold price.
Regional investment trends continued to diverge. Demand for bars, coins and ETFs, was robust in the East, compared with a marked decline in the West. Western ETF investment flows have, however, started to return so far in Q3.
2024 full year outlook: revived Western investment flows to balance out weaker consumer demand and potentially slower central bank buying vs 2023.

Chart 1: Total gold demand reached its highest Q2 on record

Q2 total gold demand by sector, tonnes*

Sources: ICE Benchmark Administration, Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer

*Data as of 30 June 2024.

Gold supply and demand

	Q2'23	Q3'23	Q4'23	Q1'24	Q2'24	y/y % change
Supply
Mine production	899.7	937.3	954.6	859.1	929.1		3
Net producer hedging	-15.7	23.8	23.0	-24.5	-6.3	-	-
Recycled gold	324.0	290.1	313.5	348.5	335.4		4
Total Supply	1,207.9	1,251.2	1,291.1	1,183.1	1,258.2		4

Demand
Jewellery fabrication	494.1	581.0	583.4	534.4	410.6		-17
Jewellery consumption	479.4	520.0	623.4	479.1	390.6		-19
Jewellery inventory	14.7	61.0	-40.0	55.2	20.0		36
Technology	72.8	77.3	82.2	80.5	81.1		11
Electronics	59.1	63.4	67.6	66.4	67.6		14
Other Industrial	11.3	11.6	12.2	11.8	11.3		0
Dentistry	2.4	2.3	2.3	2.3	2.3		-5
Investment	252.6	155.9	257.4	200.4	253.9		1
Total bar and coin	273.7	295.0	312.8	313.4	261.0		-5
Bars	164.0	206.8	220.7	223.3	183.6		12
Official coins	85.3	54.3	60.3	66.0	52.7		-38
Medals/Imitation coins	24.4	34.0	31.9	24.1	24.8		2
ETFs & similar products	-21.1	-139.1	-55.4	-113.0	-7.2	-	-
Central banks & other inst.	173.6	359.4	211.1	299.9	183.4		6
Gold demand	993.1	1,173.7	1,134.1	1,115.2	929.0		-6
OTC and other	214.9	77.5	156.9	67.9	329.2		53
Total Demand	1,207.9	1,251.2	1,291.1	1,183.1	1,258.2		4
LBMA Gold Price (US$/oz)	1,975.9	1,928.5	1,971.5	2,069.8	2,338.2		18

Source: ICE Benchmark Administration, Metals Focus, World Gold Council

This article is a re-post from here.

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3 Comments

by nigelh | 4th Aug 24, 8:41am 1722717719

From the mouth of Chatgpt

The Reserve Bank of New Zealand does not hold any gold reserves. Unlike many other central banks around the world, the Reserve Bank of New Zealand's official reserves consist mainly of foreign currency assets and Special Drawing Rights (SDRs) rather than gold. This approach aligns with the country's focus on maintaining liquidity and managing currency exchange rate fluctuations rather than holding physical gold as part of its reserve assets.

We are in good company. with Canada, Norway and Iceland who do not currently hold gold reserves.

I'd prefer us to have a little gold in our backpocket

by Threecents | 4th Aug 24, 1:57pm 1722736647

I agree Nigel, hopefully the RBNZ is not telling what it is doing.

This article is interesting but I linked it for the comment from the Dutch central bank official in the last paragraph.

The 14,000 gold bars remain there until needed. Voormeulen: "The gold is the ultimate reserve if the entire financial system were to run into problems and nothing is of value anymore. Then the gold is still worth a lot of money. We can then start over with that."

https://nos.nl/artikel/2475275-hoe-verplaats-je-in-het-geheim-15-miljard-aan-goudstaven-en-geld

by wingman | 4th Aug 24, 5:29pm 1722749340

Most countries that own gold are backwaters.

The USA's an exception, they own their gold because it's traditional, not because it's a meaningful investment, it's a pittance compared to the wider US economy. Some of it's used as a tourist attraction in NY.

Canada sold all theirs after concluding it was a dud. Gold is a dud investment, it costs to store it and has no dividend.

How far are we away from mining asteroids? One of them is made up of so much gold, everyone on Earth could be given US$93 billion. The Japanese have already done it, several years ago, and sent samples back to earth from a distant asteroid.