Despite fewer purchases overall, demand is still historically high, paced by central banks stuffing reserves with the yellow metal.
[This article previously appeared on HardAssetsInvestor.com and is republished here with permission.]
The Big Picture
Total gold demand in the second quarter was down 7 percent from a year ago, to 990 tons, making the third-straight quarter of declines. Part of that decline is due to the near-balanced inflows and outflows in the ETF sector, with the sector seeing net demand hit -0.8 tonnes. But declines were greater in the all-important jewelery sector.
Expanding the time line, the first six months of the year also show gold demand down 5 percent compared with 2011, with total gold demand equaling 2,090.8 tons, a number still above the five-year average of 1828.7 tons. So while gold demand may be slightly lower compared with the highs we've seen recently, it's still historically high.
However, there's no denying that appetite for the yellow metal is in decline everywhere. Everywhere, that is, but the official sector — the only market segment to post an increase, rather than decrease, in demand.
