The first half of this year saw rising gold demand, a period coinciding with a favourable climate for a stronger price for the yellow metal.

Demand for gold rose by 8 per cent in the first six months of 2019, reaching a three-year high of 2,181 tonnes, largely driven by strong central bank purchases, according to industry figures. 

Central bank buying and “healthy” ETF inflows were the driving forces behind gold demand throughout the first half of 2019, according to the World Gold Council. The organisation said that growth in H1 jewellery demand was largely the product of a more positive environment for Indian consumers.

Since the end-point of the data period for 30 June, gold prices have also marched higher, fuelled by worries about deteriorating geopolitical events (Straits of Hormuz, Hong Kong protests, US-China trade disputes, Brexit uncertainties). As of yesterday, an ounce of gold fetched $1.464, compared with $1,212 on 11 August last year. 

Source BullionVault

The report also coincided with comments from some private banks that clients should consider gold as portfolio insurance. 

The WGC said that shifts in bar and coin investment were very much price-related: as the gold price powered its way to multi-year highs, profit-taking kicked in and retail investment all but “dried up”.

The gold demand picture was not uniform. The WGC said that the technology sector reduced its usage of gold due to challenging global conditions, although the outlook is for this element of demand to establish something of a floor over coming quarters. 

Growth in both mine production and recycling fed into a 2 per cent increase in total H1 gold supply.