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Global Gold Demand Hits H1 Three-Year High as Central Banks & ETFs Lead the Charge - Nathan McDonald (1/08/2019)

Global Gold Demand Hits H1 Three-Year High as Central Banks & ETFs Lead the Charge - Nathan McDonald (1/08/2019)
By Nathan McDonald 24 days ago 10313 Views No comments


The World Gold Council has just released their latest figures on global gold demand for the first half of the year (H1), and as predicted, it once again ticked higher, solidifying an already-strengthening trend and proving that the flight towards safety—towards precious metals—is here to stay.

As I have written numerous times over the past year, countries are adjusting to the new geopolitical uncertainty that the world now finds itself in.

Trade wars are raging all across the globe, with the current U.S. administration leading the charge. President Trump seeks to fulfill one of his key campaign promises of placing "America first", bull-charging ahead and shattering the status quo of trade that the world has created over the last few decades.

No matter where you stand on this situation, whether it is in support, disgust, or indifference, it matters little (at least until the 2020 elections), as this new reality we now find ourselves in is unlikely to change in the short term.

A number of Central Banks, most notably China and Russia, are finding themselves directly in the center of this geopolitical storm. They are thus actively making plans to protect themselves from financial ruin, including the rapid accumulation of gold bullion and the shedding of U.S. dollars.

As the World Gold Council highlights, H1 gold demand reached a three-year high, hitting 2,181.7 tons, with Central Banks and ETF inflows leading the charge. This is an 8% increase year over year, illustrating just how strong the trend towards gold bullion is.


Central Bank buying accounted for 374.1 tons, leaving the market in H1, while the next largest collective institutional purchaser, ETFs, added 67.2 tons in Q2, bringing their combined gold holdings to 2,548 tons, a six-year high.

In addition to Central Banks and ETFs being large purchasers of gold, another key player in the metals market fiercely increased its demand: the Indian consumer.

On the heels of a strong wedding and festival season, India’s jewelry market increased its demand for gold bullion by 12% in Q2, accounting for 168.8 tons.

In many parts of the world, gold bullion is given the honor it deserves and is looked at for what it is: no matter the form it takes—whether it be bar, coin, or jewelry—it is treated as money.

This positive news in total global demand for gold bullion confirms the recent strong action we have seen in the price of precious metals, with the yellow metal posting impressive gains, breaking through the $1400 mark and trading solidly above it, building a floor.

Now, in addition to the Central Banks continuing their trend into gold bullion, we have the Federal Reserve once again cutting interest rates, just as the markets widely predicted.


This has caused gold to move sharply higher, as people are finally waking up to the fact that the easy money party is not only going to continue, but get even better.

In classic FED double-speak, Chairman Powell is quoted saying the following during Wednesday’s rate cuts:

Let me be clear – it’s not the beginning of a long series of rate cuts.”

Only to follow later with:

“I didn’t say it’s just one rate cut.”

FED jawboning at its finest.

What we can expect throughout the remainder of 2019 is continued strength in global gold demand, with silver eventually waking up and playing catch up. I believe this is where the real, significant gains will be made.

Strong demand will, in all likelihood, remain in place as Central Banks continue their accumulation process and as the FED continues to act in a dovish manner, doing the bidding of Wall Street as they attempt to keep this artificially-inflated market chugging along for as long as they can.

In the meantime, remember the following: The trend is your friend until the end, and the trend towards higher gold bullion prices is now solidly in place. Keep stacking.

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered investments , there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.



Nathan McDonald is a libertarian, entrepreneur and precious metals enthusiast. He has always taken a keen interest in free markets and economics since an early age, which naturally led him to become a true believer in precious metals and all that they stand for.

Nathan served eight years in the Royal Canadian Navy as an electronics technician, seeing the true state of the world, before starting his first successful business. He has since gone on to create a number of businesses, all of which are still in operation and growing.

In addition to this, Nathan runs a network of successful precious metals blogs, and a growing newsletter that has attracted readers from all around the world. He is a regular and highlighted writer for the highly respected Sprott Money Blog, which covers world events, geopolitics and of course precious metals.


The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.You may copy, link to or quote from the above for your use only, provided that proper attribution to the source and author is given and you do not modify the content. Click Here to read our Article Syndication Policy.

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