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Home/Global gold investment drops in first half of 2021
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Global gold investment drops in first half of 2021

In the first six months of this year, world gold demand, excluding over-the-counter trades, was down 10% year on year, according to the World Gold Council

Global gold demand declined in the first half of the year from the same period in 2020, as investment in the precious metal dropped by 60%, according to a report from the World Gold Council released Thursday.

In the first six months of this year, world gold demand, excluding over-the-counter trades, totalled 1,833.1 metric tons, down 10% year on year, the report said.

The investment segment of gold demand in the first half of the year, which includes bars and coins and gold-backed exchange-traded funds (ETFs), totalled 455.9 metric tons, down 60% from the same period a year earlier, when gold exchange-traded fund (ETF) inflows were at a record, the World Gold Council report said.

Investment demand declined as prices for gold dropped for the period. Based on the most-active contract, gold futures dropped 6.6% in the first half of 2021. The December contract settled at $1,804.60 an ounce on Wednesday.

For the first half of the year, gold ETFs saw an outflow of 129.3 metric tons, compared to record 2020 first-half inflows of 731.2 metric tons, the World Gold Council report said.

Gold ETF net outflows in the first half of 2021 offset gains from central banks, bar and coin investors and jewellery buyers, Juan Carlos Artigas, global head of research at the World Gold Council, told MarketWatch. He said the outflows were influenced by rising interest rates earlier in the year and renewed risk appetite as the global economy started to recover from the impact of COVID-19.

Gold ETFs gained momentum in the second quarter, but the inflows for the quarter were not enough to counteract the heavy outflows witnessed during Q1, he said.

In the second quarter, gold ETFs saw net inflows of 40.7 metric tons, though inflows were less than 10% of the “huge” 426.5 metric-ton inflows seen in the second quarter of 2020, the World Gold Council report said. The inflows a year earlier were driven by rate cuts, growing safe-haven demand and rising gold prices, the report said.