New Delhi [India], A notable performer, gold is up 12 percent year-to-date, outperforming most major asset classes, the World Gold Council said in its Gold Mid-Year Outlook 2024 .
It noted that the rise has been driven by continued central bank purchases, strong Asian investment flows, resilient consumer demand and continued geopolitical uncertainties.
Looking ahead, the report adds that investors are closely watching gold's momentum in the market.
"With global economic growth indicators faltering and a market eager for rate cuts amid persistent but lower inflation, the current gold price appears to reflect consensus expectations," the report added.
The report highlights that Asian investors have significantly influenced gold's recent performance. This influence is evident through its demand for gold bars and coins, gold ETF flows, and over-the-counter market activity. Traditionally, Asian investors bought gold during price declines, but lately they have been following market trends, he said.
The gold council observed substantial growth in assets under management (AUM) of Indian and Chinese gold ETFs.
He also highlighted that the global economy and gold seem to be waiting for a catalyst. "Like the global economy, gold appears to be waiting for a catalyst. This may come in the form of Western investment flows as interest rates fall or risk metrics rise. And while its prospects are not without challenges, there is a growing appetite for gold in asset allocation strategies," the report adds.
Highlighting the likely negative impact on gold, he added that a substantial decline in central bank demand or widespread profit-taking by Asian investors could impact its performance.
"Despite these potential challenges, global investors are still benefiting from gold's role in sound asset allocation strategies," he added.
Juan Carlos Artigas, global director of research at the World Gold Council, said: "As we approach the second half of 2024, with the global economy in a state of transition, investors want to know if gold's momentum can continue or if you are running out of resources. The market used to focus solely on interest rates and the US dollar to inform its perception of gold. Through that lens, events over the past six months should have significantly affected gold's performance, and yet we have had all-time highs and strong performance. during the second trimester."
Mentioning the effect of a sharp rise in the price of gold, the report adds that gold prices have reduced demand in markets such as India and China, although positive economic growth may mitigate this effect.
Stable gold prices can attract buyers who are more concerned about price swings than high prices. This is especially true in India, where people expect the economy to grow and see gold as a safe investment, the report added.
It noted that the rise has been driven by continued central bank purchases, strong Asian investment flows, resilient consumer demand and continued geopolitical uncertainties.
Looking ahead, the report adds that investors are closely watching gold's momentum in the market.
"With global economic growth indicators faltering and a market eager for rate cuts amid persistent but lower inflation, the current gold price appears to reflect consensus expectations," the report added.
The report highlights that Asian investors have significantly influenced gold's recent performance. This influence is evident through its demand for gold bars and coins, gold ETF flows, and over-the-counter market activity. Traditionally, Asian investors bought gold during price declines, but lately they have been following market trends, he said.
The gold council observed substantial growth in assets under management (AUM) of Indian and Chinese gold ETFs.
He also highlighted that the global economy and gold seem to be waiting for a catalyst. "Like the global economy, gold appears to be waiting for a catalyst. This may come in the form of Western investment flows as interest rates fall or risk metrics rise. And while its prospects are not without challenges, there is a growing appetite for gold in asset allocation strategies," the report adds.
Highlighting the likely negative impact on gold, he added that a substantial decline in central bank demand or widespread profit-taking by Asian investors could impact its performance.
"Despite these potential challenges, global investors are still benefiting from gold's role in sound asset allocation strategies," he added.
Juan Carlos Artigas, global director of research at the World Gold Council, said: "As we approach the second half of 2024, with the global economy in a state of transition, investors want to know if gold's momentum can continue or if you are running out of resources. The market used to focus solely on interest rates and the US dollar to inform its perception of gold. Through that lens, events over the past six months should have significantly affected gold's performance, and yet we have had all-time highs and strong performance. during the second trimester."
Mentioning the effect of a sharp rise in the price of gold, the report adds that gold prices have reduced demand in markets such as India and China, although positive economic growth may mitigate this effect.
Stable gold prices can attract buyers who are more concerned about price swings than high prices. This is especially true in India, where people expect the economy to grow and see gold as a safe investment, the report added.
