Gold de­mand jumps amid global tur­moil

The Myanmar Times - - Business -

DE­MAND for gold soared in the sec­ond quar­ter as in­vestors shel­tered from global tur­moil in­clud­ing Brexit, the World Gold Coun­cil (WGC) said.

To­tal gold de­mand stood at 1050 tonnes in April-June pe­riod, an in­crease of 15 per­cent com­pared with the sec­ond quar­ter of 2015.

That took first-half de­mand to 2335 tonnes – which was the sec­ond­high­est level for that pe­riod and not far from the record 2371.5 tonnes seen in 2013.

“In­vestors sought risk di­ver­si­fi­ca­tion and a safe store of value in the face of con­tin­ued po­lit­i­cal, eco­nomic and so­cial in­sta­bil­ity,” WGC added.

In­vest­ment de­mand surged 141pc to 448 tonnes in the sec­ond quar­ter.

Jew­ellery de­mand sank 14pc to 444 tonnes – with heavy falls in key mar­kets China and In­dia – and cen­tral bank pur­chases also slid.

But over the course of the first half, in­vest­ment de­mand leapt to a record 1064 tonnes, stim­u­lated by soar­ing prices.

Gold is widely re­garded as a safe store of value by in­vestors, in times of height­ened geopo­lit­i­cal and eco­nomic tur­moil.

Prices jumped by about one quar­ter in value dur­ing the first half.

“A num­ber of fac­tors turned the at­ten­tion of the Western in­vestor com­mu­nity to­wards gold in the open­ing months of the year – and brought it even more sharply into fo­cus in the sec­ond quar­ter,” the WGC said.

“Global mon­e­tary pol­icy re­mained front and cen­tre. Neg­a­tive in­ter­est rate poli­cies in Ja­pan and Europe, com­bined with ex­pec­ta­tions of a slow­down in the cy­cle of US rate hikes, un­der­pinned in­vestors’ gold-pos­i­tive sen­ti­ment.”

At the same time, how­ever, high prices con­trib­uted to­wards “lack­lus­tre” con­sumer pur­chas­ing, par­tic­u­larly in price-sen­si­tive mar­kets.

“The global pic­ture for gold is dom­i­nated by con­sid­er­able and con­tin­ued in­vest­ment de­mand driven by the West as in­vestors re­bal­ance their in­vest­ments in re­sponse to the ev­er­ex­pand­ing pool of neg­a­tive yield­ing gov­ern­ment bonds and height­ened po­lit­i­cal and eco­nomic un­cer­tainty,” added Alis­tair Hewitt, WGC head of mar­ket in­tel­li­gence.

Photo: EPA

De­mand for gold has surged.

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