Gold price rally driven by Central Banks and OTC buying – World Gold Council

The Gold price rally in Q1 was driven by a combination of strong central bank and OTC buying, according to a recent report by the World Gold Council (WGC). 

Total demand during the period was estimated at 1,238.3 tonnes compared to 1,269.7t in the previous quarter. 

Over-the-Counter, or OTC buying – which is not conducted via exchanges and so can only be estimated – rose by 136.4t compared to 126.9t in Q4. 

Heavy buying by central banks was a contributing factor in the rally in Gold price, with 289.7t of Gold bought by this market compared to 219.6t in the previous quarter. 

“Q1 saw no let-up in the pace of central bank gold buying: 290t (net) was added to official holdings,” said the report. 

Further details from the WGC report are as follows: 

• Gold mine production increased 4.0% YoY to 893t – a record first quarter for the WGC data series.
• Gold recycling climbed 12% YoY to 351t, the highest quarter since Q3 of 2020.
• Eastern investors exhibited different behavior to Western investors, whilst Western gold buying experienced healthy levels of profit-taking. “This contrasted with strong buying into the price surge in Eastern markets,” said the WGC report. 
• Global Gold ETF holdings fell by 114t, with Europe and North America experiencing quarterly outflows. 
• Demand from the jewelry sector remained healthy, given the price rally. Global jewelry consumption fell just 2.0%.
• Gold demand from the technology sector rose 10.0% YoY as the AI boom boosted buying from the tech sector