Gold demand in June quarter down y-o-y by 8%

28 Jul 2022 , 08:45 AM

According to the World Gold Council, the second quarter’s worldwide gold demand was down 8% from the same time in 2021 due to a substantial decline in investor purchases. In times of unrest, gold is often considered a safe location to store cash, and as Russia invaded Ukraine and inflation shot up quickly early in the year, investment demand skyrocketed.

However, central banks soon started increasing interest rates. This raised the risk of recessions while simultaneously raising bond rates, decreasing the appeal of non-yielding gold, and strengthening the currency, increasing the cost of dollar-priced bullion for buyers using other currencies.

According to the WGC’s most recent quarterly report, exchange-traded funds (ETFs) that store bullion for investors sold 38.8 tonnes of gold back into the market between April and June. That selling coincided with a drop in gold prices, which have fallen from above $2,000 in March to about $1,720 an ounce today.