According to the World Gold Council, global gold production soared to a record high of 929 tons in the second quarter of 2024. This increase comes amid firm demand and unprecedented gold prices.
In June alone, central banks globally recorded 12 tons of net gold purchases. These transactions were facilitated through the International Monetary Fund and other public data sources. As of the time of reporting, gold prices had reached $2,473.64 per ounce, underscoring gold’s position as a strong asset in the current volatile economic landscape.
The second quarter saw gold prices hitting record highs. These peaks were driven by continuous central bank buying, robust over-the-counter (OTC) investment, and a rise in Western exchange-traded fund (ETF) inflows later in the quarter. However, the high prices negatively impacted jewelry consumption.
Overall global gold demand, including OTC investment, rose by 6% year-on-year to 1,258 tons. The World Gold Council highlighted this in its Goldhub report. The London Bullion Market Association (LBMA) reported that the average gold price in Q2 was a record $2,338 per ounce, up 18% year-on-year and 13% quarter-on-quarter.
OTC investment, totaling 329 tons, was a major contributor to the second-quarter gold demand. This, combined with ongoing central bank purchases, pushed gold prices to new highs during the quarter.
The total gold supply increased by 4% to 1,258 tons. This includes the 929 tons from mine production, marking the highest second-quarter production ever. Additionally, recycling supply was the highest for the second quarter since 2012, driven by the rising gold price.
Investment trends varied by region. There was strong demand for bars, coins, and ETFs in Eastern markets, contrasting with a decline in Western markets. However, Western ETF investment flows began to recover in the third quarter.
The World Gold Council’s outlook for the remainder of 2024 anticipates a resurgence in Western investment flows, which may balance out weaker consumer demand and potentially slower central bank buying compared to 2023.
Central bank activity was prominently led by emerging market banks. The Central Bank of Uzbekistan and the Reserve Bank of India each added 9 tons to their reserves in June. Conversely, the Monetary Authority of Singapore was the largest seller, offloading 12 tons.
While overall purchases and sales were lower compared to the same period last year, buying strength persists, driven mainly by emerging market banks. These banks continue to play a crucial role in the gold market, driving both purchases and sales.
The second quarter of 2024 has been remarkable for the gold market. Record production, soaring prices, and robust demand from various sectors have underscored gold’s status as a valuable asset. As we move into the latter half of the year, the focus will be on how Western investment flows and central bank activities evolve, potentially shaping the gold market’s trajectory.
Source: Mining Weekly
