World Gold Council - First Quarter Gold Demand 2nd Largest on Record

According to a report published on May 12 by the World Gold Council, demand for the yellow metal reached 1,290 tons in the first quarter of this year, making it the second largest quarter on record. The increase was helped by inflows into exchange-traded funds (ETF's), amid concerns about the shifting global economic and financial landscape.

Global demand for jewelry fell by 19% which was caused by higher prices and industrial action in India. But total gold bar and coin demand rose marginally by 1%.

A very important factor in this equation is that world central banks remained strong buyers, purchasing 109 tons during the quarter.

As a result, the World Gold Council confirmed that the gold price rose 17% in dollar terms during the first quarter.
This is the yellow metal's best performance in 30 years.

In its announcement, The World Gold Council lists the primary factors it feels are behind the sudden gold price surge as well as giving its opinion regarding future gold price movements-

"The rally, in our view, was supported by five key factors:We believe that these factors will continue to support both investment and central bank demand in the coming quarters. Combined with an analysis from past bull-bear cycles, this suggests that we may be entering a new bull market for gold."

For those of you not familiar with the World Gold Council, it is the market development organization for the gold industry. It consists of 17 members, each member being a major gold mining operation headquartered throughout the world and together these members have operations in over 40 countries.

This obviously has positive implications for the gold price in the near future and most likely for years to come if demand continues to strengthen, and the abovementioned factors remain in place.
By Tzemach Richter

Copyrighted 2020. Content published with author's permission.

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