Q2 Gold Demand Rose On Strong ETF Inflows, Says World Gold Council

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Global gold demand rose further in quarter two thanks to “hefty” demand in the exchange-traded fund (ETF) market. That’s according to data from the World Gold Council (WGC).

Including over-the-counter (OTC) investment, total bullion demand rose 3% year on year between April and June, to 1,249 tonnes.

In value terms, demand soared 45% to $132 billion, thanks to fresh gold price strength. The precious metal printed a new quarterly record of $3,280.35 per ounce, the WGC said. This was up 40% year on year and 15% from quarter one.

Gold prices struck new all-time highs just above $3,500 per ounce in late April.

Gold ETFs Lead Investment Flows

Robust ETF inflows, combined with strong bar and coin demand, drove total gold investment demand 78% higher year on year, the WGC said. This totalled a whopping 477 tonnes.

The Council said that “the themes that created such fertile ground for gold investment in Q1 remained very much in play during the second quarter.”

These included “fluctuating US trade policy; a weaker US dollar; heightened geopolitical tensions punctuated by regional flare-ups; close attention to the respective paths of inflation and economic growth; and fresh record highs in the gold price that attracted further investment inflows,” it added.

Gold-backed ETFs saw a 170-tonne increase in quarterly holdings, as strong demand in April and June offset May’s monthly decline.

As a result, total holdings rose 397 tonnes over the course of the first half. This represented the strongest semi-annual performance since the first half of 2020, when funds printed a record 734-tonne increase.

North American ETFs added 73 tonnes of the yellow metal, taking total holdings to 1,857 tonnes (and assets under management (AUMs) to $196 billion).

Asian inflows were slightly behind at 70 tonnes. The WGC described buying activity as “all the more impressive considering their collective holdings are less than one-fifth the size at 321 tonnes ($35 billion).”

European funds added 24 tonnes, taking physical holdings to 1,367 tonnes and AUMs to $144 billion.

Mixed Demand Elsewhere

Elsewhere, second-quarter gold bar and coin demand was up 11% year on year, at 307 tonnes.

This was down 6% from the “very strong” 325 tonnes punched in the prior quarter, the WGC said. However, it added that quarter two’s investment was “comfortably above the 290-tonne five-year quarterly average.”

Solid second-quarter demand also meant first-half bar and coin investment reached levels not seen since 2013.

Central banks bought 167 tonnes of the precious metal, though this was down 21% year on year and 33% on a quarterly basis.

The WGC said that “this represents the lowest level of quarterly demand since quarter two of 2022.” But it added that “demand remains 41% above the average quarterly level that was typical between 2010 and 2021.”

Gold jewellery demand totalled 341 tonnes, down 14% year on year. The Council said that “volumes continued to decline… as record gold prices during the quarter further impinged on affordability.”

Jewellery demand fell to levels not seen since the third quarter of 2020.

Technological demand for gold slipped 2% year on year to 78.6 tonnes, as tariff-related uncertainty impacted the electronics industry.

On the supply side, levels rose 3% year on year in the second quarter, to 1,249 tonnes. Mine production edged 1% higher, to 909 tonnes. Recycled gold volumes increased 4% to 347 tonnes.