Gold price and demand: Record amount of 387 tons of gold from central banks in the first half of 2023

The price of gold is currently struggling to break the $2,000 mark. But there is clearly a tailwind in the physical gold market. At least that's what Ruth Crowell, CEO of the London Bullion Market Association (LBMA) says. Unprecedented demand for gold has been seen in 2023, as central banks purchased a record 387 tonnes of gold in the first half of the year and the world's appetite for the precious metal dwarfs other alternative investments.

“Available industry data from the first two quarters of 2023 shows demand for gold is at record levels,” Crowell said in an interview with NASDAQ newsletter Trade Talk. “However, demand was much stronger in Q1 than in Q2.” She said central banks bought 387 tonnes of gold in the first half of the year and the LMBA expects demand from this sector to remain net positive in the second half of 2023.

Total demand for gold in the first half of the year, including investments and jewelry, was said to be 7 percent higher than the same period in 2022. "In particular, the investment sector, which includes bars and coins, totaled 582 tons," she said. However, she noted that the only area of ​​decline was exchange-traded funds, which saw net outflows of 50 tonnes during the period.

“Inflation in the U.S. and globally, and the rate hikes that most central banks (except Chinese and Japanese) are making to combat inflation, have proven to be the main drivers of gold prices over the year,” she said. Despite the weakness at the end of the third quarter, the gold price is positive for the year. “The price increase was predicted in an LBMA survey of professional gold analysts conducted in January, which showed an average price of $1,859.90 for the full year.” The forecast was adjusted to $1,930.33 in the middle of the year.

The large ETF purchases are certainly still missing to give the gold price even more of a boost. But DER AKTIONÄR assumes that these will come with an end to interest rate increases in the USA and a deteriorating economy. THE SHAREHOLDER remains bullish on the price of gold.