John Luca, the economist, stated that the gold market witnessed significant dynamic changes during the second quarter of the year, with total demand for the yellow metal increasing by 3% year-on-year, reaching 1,249 tons. Meanwhile, the value of this demand surged by 45%, totaling $132 billion, driven by rising gold prices and increasing demand for it as a safe-haven asset amid global economic challenges.
Luca pointed out that gold-backed exchange-traded funds (ETFs) played a pivotal role in boosting demand for the second consecutive quarter, benefiting from global trade policy uncertainty and geopolitical tensions, as well as the continuous rise in prices that attracted investments into these funds.
He explained that investors in gold bars and coins have strongly joined this trend, making this investment category achieve its best half-year performance since 2013.
Luca added that central banks continued to play their role as a major driver of global demand for gold, adding 166 tons to their official reserves. While the pace of their purchases has slowed somewhat, this trend remains a positive indicator of sustained demand from these institutions.
In the same context, Luca noted that the gold jewelry market showed a clear contradiction, as demand volumes dropped to levels similar to those seen during the 2020 pandemic period, while global spending on jewelry increased, driven by higher prices.
Regarding the technology sector, Luca mentioned that the use of gold in this field has been under pressure due to potential threats from U.S. tariffs, but he highlighted that the growing demand for applications related to artificial intelligence is a strong point supporting continued demand in this sector.
Luca concluded his statement by emphasizing that gold remains one of the most attractive assets amid current economic and geopolitical volatility.
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