World Gold Council released the latest Global Gold Demand Trends Report on August 4, indicating that global gold demand in the second quarter showed unexpected resilience, driven by strong central bank buying and ETF capital inflow. This report is considered a key indicator for gold bulls and provides a fundamental basis for recent record-high gold prices. Central Bank Buying Remains Strong The report shows that total global gold demand excluding spot transactions reached 1,245 metric tons in the second quarter, a year-on-year increase of 4%. Among this, central banks in various countries purchased over 180 metric tons in the third quarter, reaffirming the trend of central banks moving away from the dollar and diversifying reserves. Notably, central banks in emerging markets remain key players, with continued net buying from countries such as China, India, Poland, and Turkey. The Bank of Thailand also increased its buying in the second quarter, indicating the strategic importance of gold reserves in Southeast Asian nations. ETF Reverses Four Years of Decline Besides central banks, gold ETFs have become a major engine for demand growth. In the second quarter, global gold ETFs recorded a net inflow of over 60 metric tons, ending a four-year streak of net outflows. With geopolitical tensions and expectations of rate cuts in Europe and the US, investors are reallocating gold holdings; the scale of gold ETFs in Asian markets is also growing rapidly, with several gold ETF asset management sizes, including in Thailand, reaching new historical highs. Supply Tightening and High Prices: A Double-Edged Sword On the supply side, global gold mine production in the second quarter increased by only 1% compared to the same period last year. However, the increase in recycled gold supply, stimulated by gold prices breaking $2,500, was significant, becoming a major source of total supply growth. Analysts point out that the increase in recycled gold is a short-term phenomenon; if gold prices continue to rise, consumer reluctance to sell may limit the supply of recycled gold in the future. In the long term, declining mine yields and rising extraction costs will tighten the supply structure. Gold Price Volatility Builds Momentum; Institutions Optimistic About the Market Affected by weak non-farm data and expectations of Fed rate cuts, gold prices briefly reached a historical high of $2,550 in early August before consolidating at a high level. Many market analysts view this as a healthy correction that does not break the bull structure. A precious metals analyst at UBS confirms that the World Gold Council report confirms strong physical demand, coinciding with the impending monetary easing cycle, suggesting that gold has a chance to challenge the $2,600 barrier in the third quarter. Thailand Market: Rising Gold Prices Drive Investment Sentiment In the local Thai market, due to fluctuations in the Thai baht exchange rate and rising global gold prices, the Thailand Association of Gold Traders raised domestic gold prices again today, with the selling price of gold per Baht (15.244 grams) nearing 42,000 Baht, setting a new historical high. This was followed by a surge in gold recycling, as many people converted aged gold jewelry into cash, while new investors entered the market through gold bars and gold ETFs, making market transactions very active. Second Half Outlook: Multiple Bullish Factors Converge Overall, the market outlook for precious metals in the second half is bullish. On one hand, the Fed initiating rate cuts is nearly certain, and a lower real interest rate environment is favorable for gold performance. On the other hand, unresolved geopolitical conflicts and policy uncertainty in major elections ensure a persistent demand for safe-haven assets. Coupled with the floor provided by routine central bank buying by various nations, the bull structure for precious metals remains solid. For investors, allocating gold to their asset portfolio is still an effective strategy for hedging against inflation and black swan events. (Data and information in this article are for reference only; investors should assess their own risks.)
Detail Page Advertisement