Whether you are a person who follows the latest trends in the precious metals market or you have simply heard about some of the climb on the news, there is no denying the sudden influx of buyers purchasing physical gold during the second quarter through April to June. The World Gold Council, or WGC, noted there there was a whopping 53% rise in bullion purchases from just a year ago. The total of the purchases of gold coins, gold bars and jewelry is up to just over 1,083 metric tons according to reports.
When taking a look at some of the buying trends, 310 metric tons of physical gold purchases came from India at around a 71% increase when compared to just a year earlier. Coming in a close second was China with about an 87% increase with a purchase amount of just over 275 metric tons. Because the demand for both gold bars and gold coins are on such a steady rise, it is sparking quite a bit of interest from both sellers and investors alike.
Many investors have been watching the trend closely especially seeing how the reports have also been showing that there has been a drop in ETF, exchange traded funds, in the second quarter as well. Falling an annualized 12% during the second quarter to about 856 metric tons, analytics equate this drop to a pretty hefty sell off in gold ETF’s. As a counter to the swift buying in physical gold, ETF sell offs jumped to just over 402 metric tons during the quarter up from the 176.5 metric tons from the January to March quarter.
It goes without saying that these changes in the physical gold market and precious metals market overall have had quite an impact on the behaviors of many investors. Central banks have slowed their buying considerably and other countries such as Russia have shown concentrated buying in the range of about 15 tons. With the reduction of the rate found in foreign exchange reserves along with the emerging market currencies being weakened, the World Gold Council cites the many volatile price moves.
Due to the presence of lower inflation levels, it has been expected that the United States Federal Reserve will end up withdrawing liquidity. Along with that, the additional rise in the United States Treasury yields have begun to drive many hedge funds and a number of speculative investors to give up their prominent positions in the gold market over the recent months. As a matter of fact, there have even been several high profile investors that have cut down on their stake in gold throughout the second quarter.
While the market continues to be shaky, it is important to keep an eye on both physical gold as well as ETF’s in order to remain successful with the precious metals market. Even though it is nearly impossible to find out where gold will be shifting in the near future, staying on top of the trends is the best possible way to remain on point.