To The Moon

According to the World Gold Council's (WGC) recently released "Global Gold Demand Trends Report" for the first quarter of 2024, total global gold $Gold - main 2406(GCmain)$ demand (including off-exchange transactions) increased 3% year-on-year to 1,238 tons. With the strong demand, the average gold price hit a record high of $2,070 per ton in the first quarter, up 10% year-on-year and 5% quarter-on-quarter.

Louise Street, a senior market analyst at the WGC, said:

Since March, gold prices have risen to an all-time high, ignoring traditional negative factors like a strong dollar and high interest rates.

The driving forces behind the gold price rally include rising geopolitical risks and persistent macroeconomic uncertainty, which are driving the demand for gold as a safe-haven asset.

Plus, there's the continued strong demand from global central banks, robust off-exchange investments, and an increase in net purchases in the derivatives market.

The trend of "east strong, west weak" in the gold market was particularly evident in the first quarter.

There's been a shift in the behavior of investors in the east and west. Traditionally, investors in the east tend to buy when prices are falling, while western investors prefer to buy when prices are rising.

But in the first quarter of this year, even though gold prices continued to surge, eastern investors were unfazed. Investment demand in markets like China and India grew significantly. In contrast, while gold purchases in the west were still robust, the tendency to take profits was more evident.

In terms of investment demand, global investment in gold bars and coins increased 3% year-on-year to 312.3 tons, with strong demand for small gold bars in Asia. Overall global demand for gold jewelry declined 2% to 479 tons, but the increase in demand in Asia offset the decline in Europe and North America. Global gold ETFs continued to see outflows, with total holdings down 114 tons. But the outflows were mainly from funds in North America and Europe, while Asian funds saw inflows, led by Chinese market funds.

Global central banks have maintained a robust pace of gold purchases, adding 290 tons to their official gold reserves this quarter. As market volatility and risks rise, global central banks continue to purchase large amounts of gold, highlighting the important role of gold in international reserve portfolios.