Demand for gold appears to be waning with the price of the precious metal hovering near an all-time high.
The price of gold has risen 18.5% year-to-date and hit record highs on multiple occasions in recent months.
Currently, gold is trading at $2,427 U.S. per ounce, which is not far from its all-time high of $$2,483.60 U.S. an ounce reached on July 17 of this year.
However, indications are that demand for gold among consumers and central banks is beginning to soften due to the elevated price.
The World Gold Council has released its latest quarterly report and it shows that gold had demand of 1,258.2 metric tons in this year’s second quarter, up 4% from a year earlier.
However, much of that demand from gold came from buying among institutional investors, high net-worth individuals, and family offices.
Demand for gold in jewellery, which is driven by consumers’ appetite for the precious metal, declined 19% in Q2 from a year ago.
Additionally, gold demand among official coins plunged 38% during the year’s second quarter.
This data points to consumers starting to pullback on their gold purchases as prices flirt with record highs.
Jewellery demand in China and India, the two largest buyers of physical gold in the world, has also fallen sharply in recent months.
China saw jewellery demand decline 35% in Q2 while India saw a 17% fall in demand.
Also worrying is the buying of gold among central banks around the world.
Data from the World Gold Council showed central bank buying in Q2 eased to 183.4 tons, down nearly 40% from the 299.9 tons in the first quarter of the year.
Until now, central bank buying of gold had helped keep prices aloft this year.
Gold is seen as a safe haven asset during times of geopolitical uncertainty and central banks had increased their buying as wars rage in Europe and the Middle East.
