Gold demand softened in Q2
Despite Q2 weakness, strong first quarter ETF inflows fuelled a notable H1 recovery
Gold demand (excluding OTC) was 8% lower y-o-y at 948t. Combined with Q1 this took H1 demand to 2,189t, up 12% y-o-y.
The LBMA Gold price PM averaged US$1,871/oz in Q2, 3% above the Q2’21 average. However, this comparison conceals the 6% decline in the price during the most recent quarter, pressured by rising interest rates and the rocketing value of the US dollar.
As the gold price fell in Q2, gold ETFs lost 39t, giving back some of the strong Q1 gains. Net H1 inflows totalled 234t compared with 127t of outflows in H1’21.
Bar and coin investment (245t) was unchanged from Q2’21 as a sharp drop in China was offset by growth in India, the Middle East and Turkey. The H1 total saw a 12% y-o-y drop to 526t on compounded Chinese weakness.
Q2 jewellery consumer demand reached 453t, 4% higher y-o-y, although the comparison is with a fairly weak Q2’21. Total H1 jewellery demand of 928t was 2% below H1’21.
Central banks continued to buy gold. Global official gold reserves grew by 180t in Q2, taking H1 net purchases to 270t.
Technology demand dipped in Q2, down 2% y-o-y to 78t on weaker demand for consumer electronics. H1 demand was fractionally lower as a result at 159t.