Global Gold Investment in Q2 2024

As global markets continue to navigate economic uncertainties, the demand for gold bars and coins in the second quarter of 2024 reveals a diverse and intricate picture. While some regions experienced robust investment activity, others saw significant declines, highlighting the multifaceted nature of the gold market.

Global Overview: Diverging Trends in Gold Demand

In Q2 2024, the overall global demand for gold bars and coins saw a modest decline of 5% year-over-year, amounting to 261 tonnes. This brought the total for the first half of the year to 574 tonnes, slightly below the figures from the previous year. However, within this aggregate, a stark contrast emerged: investment in gold bars surged by 12% year-over-year, reaching 184 tonnes—the highest level for a second quarter since 2013. Meanwhile, demand for gold coins dropped sharply by 38%, falling to just 53 tonnes, the lowest quarterly total since the second quarter of 2020.

This discrepancy can largely be traced to regional differences. In Western markets, where gold coins traditionally hold more appeal, there was a notable drop in net demand. On the other hand, strong investment demand in Asian markets, particularly for bars, helped to offset some of the decline seen elsewhere.

Regional Insights: China, India, and the Middle East

China's demand for gold bars and coins soared by an impressive 62% year-over-year, reaching 80 tonnes in Q2. Although this represented a seasonal decline of 28% from Q1, it was still the strongest second quarter for gold investment in China since 2013. Chinese investors were quick to capitalize on rising gold prices, purchasing bars and coins in anticipation of further gains. However, as the market stabilized in June, many chose to pause and wait for clearer price trends before making additional investments.

India also saw a significant increase in demand, with Q2 investment in gold bars and coins rising by 46% year-over-year to 43 tonnes. For the first half of the year, demand surged by 37% to 87 tonnes, marking the highest first-half total since 2014. The Akshaya Tritiya festival in May, along with expectations of further price rallies, drove demand. However, the potential for profit-taking in response to any sharp price increases could temper the momentum in the coming months.

In Turkey, bar and coin investment remained robust at 29 tonnes, though this was a 29% decline from the high base of Q2 2023. Despite the slowdown, demand remained above the five-year quarterly average, indicating sustained interest in gold as a secure asset amidst economic uncertainty.

Western Markets: Mixed Results

In Western markets, the investment environment was stable but overshadowed by a significant rise in selling-back, leading to a sharp decrease in overall demand for gold bars and coins. In the U.S., investment totaled 18 tonnes, though this was a 48% year-over-year decline, reflecting a very strong Q2 2023. Despite high gold prices and geopolitical risks attracting new buyers, profit-taking and distress selling among lower-income groups contributed to the net decline in demand.

Europe faced an even steeper decline, with demand dropping by 65% year-over-year to just 11 tonnes—the lowest quarterly figure since Q2 2008, before the onset of the Global Financial Crisis. While fresh buying remained healthy, it was significantly outweighed by increased selling-back.

In Australia, gold bar and coin investment fell by 19% to 3 tonnes in Q2. The total demand for the first half of 2024 was 36% lower, at 5 tonnes. A strong local currency limited the rise in local gold prices, reducing momentum-driven purchases.

Conclusion: The Lasting Value of Gold Bullion Coins

The data from Q2 2024 illustrates the complexities of global gold demand, shaped by regional economic conditions and fluctuating market prices. Despite these variations, the enduring appeal of gold as a safe-haven asset remains clear.

For investors, gold bullion coins offer a particularly compelling option. These coins provide not only the intrinsic value of gold but also a tangible, easily tradable asset. As market conditions continue to evolve, incorporating gold bullion coins into an investment portfolio can be a wise move, offering both security and potential for growth in an increasingly uncertain world.