08/06/2019 | GOLD COURSES CLIMB, DEMAND ALSO
It has been more than three years since the demand for gold reached such a level. This is the demand from investors as well as that generated by Central Banks who have embarked on a frenzied race to accumulate the yellow metal.
This accumulation is such that the Washington Agreements signed in 1999 have not been renewed this year. As a reminder, these limited the resale of physical gold by the Banks to 400 tons per year. However, sales are so anecdotal that the provisions of the agreement were almost obsolete.
The World Gold Council estimated that the increase in world demand in the first half of the year was 8% compared to last year at the same time. Such a level had not been recorded since the year 2016, it must be said that over the period from April to June, traded volumes amounted to 1123 tons, which includes the purchases of Central Banks, professional investors and individuals.
Of course, most of this demand is made up of financial investors and central banks. We were talking about an unrestrained race for the accumulation of yellow metal: the Banks alone bought 374.1 tons in the first half, 57% more than last year!
The largest volumes were acquired by Emerging Markets Banks, with Poland totaling 100 tonnes, Turkey 60.6 tonnes and China 74 tonnes.
This notable increase has its source in various factors, most of which are of geopolitical origin. This will probably not have escaped you: many uncertainties increase the risk aversion of investors and banks, thus seduced by the safe-haven status of the yellow metal.
Examples include the trade war between China and the United States but also the uncertain outcome of Brexit as well as uncertainties surrounding the management of gas and oil resources by the Gulf countries. This results in an 8% increase in the price of an ounce of gold in June alone, for a total increase of 11% over the months of May, June and July.
In view of this, investing or investing in gold seems more and more judicious, especially if the geopolitical and economic uncertainties lead to an economic crisis as the economist Jean-Luc Ginder suggested.
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