World Gold Council finds global demand for gold high in H1 2023 despite Australian interest weakening

Central bankers, nervous investors and cashed-up customers clamoured to get their hands on gold in the first half of the year, offsetting declining interest in the June quarter from Australian buyers. That’s according to new research from the World Gold Council, which found demand for gold inclusive of retail sales grew by 7 per cent on the prior comparable period. While central banks eager to retain their gold reserves in the June quarter led to a reduction in demand for that period, first-half sales nevertheless totalled 387 tonnes, which the council described as a record for the period. Central bank activity earlier in the year also bolstered investment, with Turkish and US demand for bar and coin gold increasing by 6 per cent for the period. Shaokai Fan, who leads the gold council’s central banks division, said higher gold prices had created good opportunities to sell while at the same time deterring customers already struggling with cost-of-living pressures. He said Australian gold-backed ETFs remained steady, signalling “continued appetite for physical gold as a means of investment diversification”. Senior markets analyst Louise Street said the first-half results underscored gold’s importance as a “safe-haven asset”. “Looking ahead to the second half of 2023, an economic contraction could bring additional upside for gold, further reinforcing its safe-haven asset status,” she said. “In this scenario, gold would be supported by demand from investors and central banks, helping to offset any weakness in jewellery and technology demand triggered by a squeeze on consumer spending.”