Gold Demand Hits Four Year Low

Gold demand hit a four-year low in the second quarter, despite surging appetite for jewellery, coins and bars, as investors exited bullion funds and central bank buying more than halved, the World Gold Council said.

Lower prices following a selloff in April, when spot gold dropped $200 an ounce in two days in its sharpest slide in 30 years, and another retracement in June sent bar and coin demand to record highs and jewellery buying to its strongest in nearly five years.

That consumer demand rose by more than half to 1,083 tonnes in the three months to end-June from a year earlier, the WGC said.

But a 402.2 tonne outflow from gold-backed exchange-traded funds – popular investment products that issue securities backed by physical gold – and a 93.4 tonne drop in central bank purchases knocked overall demand down 12 percent to a net 856.3 tonnes, its lowest since the second quarter of 2009.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza