Asian gold demand soars despite record prices

Gold demand across Asia is surging despite hovering near record highs of $2,300 per ounce reached in May, driven by economic and geopolitical uncertainties.

This trend is defying expectations, with analysts predicting a shift back to other investments when market conditions stabilise.

Meanwhile, retail investors are seeking gold as a safe haven amid declining confidence in real estate and equities, with geopolitical tensions. Chinese investors are buying more gold coins and bars, up 27 per cent in Q1 2024 due to devaluation fears, a property slump, and trade tensions.

In Thailand, long lines formed outside gold shops following price hikes, while Vietnam also saw strong demand despite high domestic premiums.

India and Australia are price-sensitive markets. Indian gold prices have been trading at a discount to global prices for five weeks, indicating weak demand. The Perth Mint’s gold product sales dropped by 30 per cent in May.

High prices are prompting Indian consumers to swap old jewellery for new pieces instead of purchasing new gold. As a result, India’s gold imports for 2024 are projected to decline by almost 20 per cent.

Attribution: Reuters