The report explained that the record high gold prices caused the demand for jewelry to fall by 19% to reach a 4-year low of 391 tons. The average price of the London precious metals market reached a record level of $ 2,338 per ounce in the second quarter, with an annual and quarterly increase of 18% and 13% respectively
Gold prices are experiencing good days after reaching a continuous peak in recent times, as gold is now trading in a range between $ 2,400 and $ 2,500 per ounce. However, the World Gold Council report today showed an adjustment in gold purchases during the second quarter of the year.
According to the Gold Council report, gold demand witnessed a turnaround during the second quarter of this year, as jewelry consumption was significantly reduced, which canceled out the slight increase in demand from the other day during a certain period of time.
Gold demand – over the counter (OTC) – fell 6% year-on-year in Q2, with total demand reaching 929 tones.
Taking into account transactions, total demand for the precious metal rose 4% to 1,258 thousand tonnes, the highest level for the second quarter in the data series dating back to 2000.
Gold demand was driven by its peak prices, with jewellery demand rising 19% and demand hitting a 4-year low of 391 tonnes. In the same vein, the London precious metals market average reached a record high of 2,338 per ounce in the second sector, Berlin annualized and overall 18% and 13%, respectively.
Gold price forecasts for the next five years: While most analysts expect a moderate increase in gold prices in 2025, the most optimistic forecasts for the gold price for the next five years suggest gold prices will reach the $3,000 level.
Net Central Bank Purchases
On the other hand, net central bank purchases of precious metals increased by 6% to 184 tons, due to considerations related to protection and asset factor, while consumption of the technological medium increased by 11% to reach 81.1 tons.
On the other hand, global gold sweetener funds witnessed a significant decrease of 7 tons, which is significantly noticeable compared to their decrease of 21 tons in the second sector of 2023. Individual investments in gold bars and coins fell by 5% to reach 261 tons, and this decrease was mainly due to the decline in demand in Western markets, according to the report.
Spot gold trading: Spot gold is currently trading at $ 2,389.7 per ounce, recording an increase of 0.26% in today’s trading.
December gold contracts: The price of gold futures (December) rose to $ 2,434.7 per ounce, and you did not have 0.38% in today’s trading.
Future Outlook: An important week awaits gold with the release of employment data and the insurance decision. Investments are expected to remain on the same political path, but there are some benefits and banks may be looking forward to indications of a September interest rate cut. This is the current situation of gold prices and the factors affecting them, which can benefit investors and those interested in the market.
Inflation and gold: Based on the targets of the stimulus and quantitative easing process, which focus on raising inflation rates to revive the economy, prices are inevitably subject to increases to be adjusted according to inflation.
Gold prices are necessarily included in the prices targeted to be adjusted according to inflation.
Gold is the first asset affected by inflation, due to the inverse relationship between gold prices and the dollar.
The well-established relationship between gold prices and inflation
Many examples have proven the strong relationship between gold prices and inflation beyond any doubt, or effort to prove the existence of the relationship or not.
Gold prices have been moving in direct proportion to inflation since the dollar was delinked from gold, so whenever inflation rises, gold prices rise.
The performance was almost balanced, as gold was priced according to inflation rates at fairly fair rates.
However, since the US Federal Reserve adopted quantitative easing policies as a basic solution to the financial and economic crisis, gold price movements have become disproportionate to inflation in a way that sometimes raises concerns, and sometimes doubts, and perhaps inventing alternative theories to justify the strange movement and unfair prices is another type of excitement!
Gold has not won anything in its battle with inflation for more than 10 years, and gold has not been priced by adjusting for inflation in a fair or transparent manner.
Gold is still moving within the range of 2011 prices, i.e. prices dating back 10 years!
While during the same period, the prices of all goods and products included in the US Consumer Price Index have risen significantly.
Gold Outlook in the Coming Days and Weeks: The presence of two active military theaters, the upcoming major elections and uncertain global monetary policy suggest that safe-haven demand will continue to support gold prices in the short to medium term. Overall, gold is expected to average $2,300 per ounce in Q3 2024.
Gold Price Forecast 2024: Analysts expect gold prices to continue to hit new record highs as the global gold rush continues. Gold is expected to average $2,255 per ounce in 2024, with prices peaking in Q4.
