Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

Metals – Gold demand falls marginally

In its latest update, the World Gold Council (WGC) revealed that global gold demand (excluding OTC) fell by 2.5% year-on-year to 920t in the second quarter. Cumulative demand (excluding OTC and stock flows) declined by 5.6% YoY to 2,062t in the first half of the year on slowing central bank purchases, lower consumption in the technology sector and higher prices. However, cumulative demand (including OTC and stock flows) rose by 5.3% YoY to 2,460t in the first half of the year.

Meanwhile, central bank purchases fell by 35% YoY to 103t in the second quarter of the year primarily due to the massive selling by Turkey – releasing 132t of gold in the local market. However, cumulative purchases by central banks reached 387t in 1H23, a record amount bought over a six-month period. Turning to bar and coin, demand gained 6% YoY to 277.5t. Gold ETFs reported net outflows of 21.3t over the second quarter of the year. Global jewellery consumption rose by 3% YoY to 475.9t in the second quarter.

In terms of supply, the council reported reasonable growth in mine production (+4% YoY) and recycling (+13% YoY), resulting in a higher gold supply rising by 7% YoY to 1,255.3t in the second quarter of the year.

Meanwhile, the latest LME COTR report shows that net bullish positions for copper decreased by 1,343 lots for a second consecutive week to 51,749 lots as of last Friday. Among other metals, speculators decreased their net long positions in aluminium by 5,048 lots to 101,523 lots in the week ending 28 July. In contrast, speculators increased their net long positions in zinc by 4,752 lots for a fifth consecutive week to 33,023 lots as of last Friday.