WGC Outlook: Gold Investment Demand to Remain Robust in the Near-Term

SEATTLE (Scrap Monster): The World Gold Council foresees gold investment demand to remain robust during the next six to twelve months. The consumer demand for gold is likely to soften in the near term, but long-term demand will see good support from structural economic reforms in India and China.

Gold prices surged during the first half of 2019, emerging as the one of the best performing assets by the end of June. The gold prices witnessed sharp rise in June this year. The gold-backed ETFs reported positive inflows of nearly 108 tonnes (t). The central bank gold purchases through May this year totaled around 247t, WGC report said. The gold market acted in response to various risk factors including potential negative long-term impacts of higher tariffs, geopolitical tensions between the U.S. and Iran, the uncertainty surrounding Brexit and other political and economic factors in the UK and Europe.

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The consumer demand for gold in emerging markets may remain soft this year, mainly on account of weaker economic growth and higher gold price volatility. The rise in speculative activity could result in intermittent spikes in gold prices. The net purchasing trend by central banks is likely to continue. Meantime, the hike in gold’s import duty by the Indian administration may impact Indian consumer demand.

The WGC report states that gold demand is linked to various factors including jewellery, technology and long-term savings.