Demand for gold ETFs was steady in the second quarter as prices for the precious metal were also little changed, according to a report from the World Gold Council.
Gold exchange traded funds were stuck in sideways trading through the second quarter with gold prices locked around $1,600 per ounce as demand on the lower prices offset sellers who were doubtful of a new price trend.
“Gold’s performance reflects the continuing challenging economic climate,” Marcus Grubb, Managing Director, Investment at the World Gold Council, said. “A softness in India and China, who between them represent over 45% of the total second quarter jewellery, and investment demand accounts for much of the slowing of global gold demand.”
Nevertheless, gold remains a vehicle for capital preservation and source of liquidity.
“This is evident from the activity of central banks, the ultimate long term investors, which continue to increase their gold holdings to diversify reserves and protect against reliance on one or more foreign currencies,” Grubb added.
Overall gold demand was down 7% in the second quarter compared to the same quarter last year and 10% lower compared to the first quarter, according to a World Gold Council research note.
“Demand for ETFs and similar products in Q2 was broadly flat year-on-year, as new demand was marginally outweighed by selling,” according to the note.