Global Gold Demand Drops 2%. Demand For Jewelry Increased Despite High Prices
Global Q2 Gold demand excluding over-the-counter transactions (OTC) dropped during the June quarter of 2023 whilst jewelry demand remains resilient despite high prices.
The global demand for gold decreased in the second quarter, primarily influenced by a reduction in central bank purchases due to economic challenges, high gold prices, and rising interest rates, as announced by the World Gold Council (WGC), according to Dow Jones Newswires.
Gold Bars (Source: Pixabay)
Overall, global gold demand declined by 2% on an annual basis to 921 tonnes in the period of April to June 2023.
This figure for the second quarter marks a significant decline compared to the first quarter of the year when 1,141.5 tonnes of gold were purchased.
Central bank gold acquisitions decreased by 35% on an annual basis to 102.9 tonnes in the second quarter, estimated by WGC. Compared to the first quarter, when central banks purchased 284 tonnes of gold, the decrease is 63%.
Krishan Gopaul, Chief Analyst at WGC, noted that a significant portion of this decline is related to the massive gold sales by the Central Bank of Turkey, which released 132 tonnes of gold into the local market after imports were restricted following the February 6 earthquake.
However, in June, Turkey resumed gold purchases, "so we remain optimistic that the overall year will show a net buyer," Gopaul added.
Gold purchases for jewelry manufacturing offset the decline in central bank acquisitions in the second quarter, according to WGC. Despite price increases in the second quarter, the demand for gold for jewelry increased by 3% on an annual basis to 476 tonnes.
In the second quarter, as China emerged from its post-pandemic quarantine, gold jewelry demand increased by 28%.
In contrast, gold jewelry demand in India declined by 18% due to high prices.
The average price of gold was $1,976 per ounce in the second quarter of the year, which is 6% higher than the previous year's second quarter and 4% above the record set in the third quarter of 2020.
Total gold supply increased by 7% on an annual basis to 1,255 tonnes in the second quarter, with gold mine production amounting to 923.4 tonnes of gold.