The gold price has risen this year from January, as geopolitical worries and some dollar softness has propelled the price higher. The WGC said demand has risen in the first six months of the year.
Demand for gold rose by 8 per cent in the first six months of 2019, reaching a three-year high of 2,181 tonnes, largely driven by strong central bank purchases, according to industry figures.
Central bank buying and “healthy” ETF inflows were the driving forces behind gold demand throughout the first half of 2019, according to the World Gold Council. The organization said that growth in H1 jewelry demand was largely the product of a more positive environment for Indian consumers.
Since the end-point of the data period for June 30, gold prices have also marched higher, fueled by worries about deteriorating geopolitical situations (Straits of Hormuz, Hong Kong protests, US-China trade disputes, Brexit uncertainties). As of yesterday, an ounce of gold fetched $1.464, compared with $1,212 on August 11 last year.
The report also coincided with comments from some private banks that clients should consider gold as portfolio insurance.
The WGC said that shifts in bar and coin investment were very much price-related: as the gold price powered its way to multi-year highs, profit-taking kicked in and retail investment all but “dried up”.
The gold demand picture was not uniform. The WGC said the technology sector reduced its usage of gold due to challenging global conditions, although the outlook is for this element of demand to establish something of a floor over coming quarters.
Growth in both mine production and recycling fed into a 2 per cent increase in total H1 gold supply.