Global demand for gold reached a three-year high during the first half of this year, driven by continued central bank buying and sustained growth in gold-backed exchange-traded funds (ETFs).
Overall gold demand hit 2,181.7 tonnes during the first six months of 2019, an increase of 8% compared to the same period last year.
Central banks bought a total of 374.1 tonnes of gold during the half – the largest increase for this period – driven largely by purchases made over the second quarter, according to the latest data from the World Gold Council.
Holdings in gold-backed ETFs grew to a six-year high of 2,548 tonnes in the second quarter, driven by continued geopolitical instability, expectation of lower interest rates, and the rallying gold price in June, the report found.
Strong inflows in June of 126.7 tonnes outweighed the rush to sell in April which saw outflows of 57.2 tonnes. Net inflows for the first half reached 107.5 tonnes compared to 60.9 tonnes in the same period last year.
In July The Royal Mint saw a 40% increase of new customers looking to invest in gold as the second half of the year got underway.
“Precious metals have a long-standing reputation as “safe haven” assets, whereby they have the ability to provide an additional layer of protection to investment portfolios when stock markets are more volatile,” said Nicola Howell, executive director at the UK government-owned company.
“We attribute this growing consumer appetite as a reaction to continued market turbulence, ongoing political tensions around the world, and Brexit uncertainty and confusion in the UK, as investors look to safeguard their investments.”
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