Consumer investment in gold increased in the second quarter of 2021 but some investors were less bullish, according to the World Gold Council’s latest Gold Demand Trends report. The two forces helped create a gold demand of 955.1t over the quarter – a 9% rise from Q1 2021, and in line with the equivalent period last year (960.5t).
Between April and June, most traditional indicators of consumer gold purchasing were positive. Bars and coins overwhelmingly bought by retail investors – saw a fourth consecutive quarter of year-on-year gains, with 243.8t purchased over the 3-month period. Meanwhile, consumers bought gold jewellery with a combined weight of 390.7t – 60% more than the equivalent quarter last year. There were modest net inflows of 40.7t during Q2 into gold Exchange Traded Funds (ETFs). These inflows only partially offset the heavy outflows the industry witnessed in the previous quarter, making 2021 the first time since 2014 with net outflows in the first six months of the year.
Central banks continued to buy gold throughout the quarter. Global gold reserves grew by 199.9t in Q2. The World Gold Council estimates jewellery demand could be in the range of 1,600 to 1,800t for the year. Central banks are likely to continue buying gold on a net basis in 2021 at the same rate or above that of 2020. The supply of gold in 2021 is expected to increase modestly.
