Recently, the World Gold Council released the Report on Global Gold Demand Trends in the first quarter of 2024 (the Report for short), which shows that the total global gold demand in the first quarter (including over-the-counter transactions) increased by 3% to 1238 tons year-on-year, which is the strongest demand performance in the first quarter since 2016.
The Report pointed out that in the first quarter of 2024, China's overall domestic gold demand reached 343 tons, up 3% year on year, more than 25% above the 10-year average. Among them, gold bars and coins became the main engine supporting demand growth, with a year-on-year increase of 68% to 110 tons.
Increased holdings for 17 consecutive months
The People's Bank of China remains the largest buyer in the gold market
On April 30, the World Gold Council released the Report on Global Gold Demand Trends in the first quarter of 2024, which showed that the global central banks continued to maintain a rapid buying trend. In the first quarter, the global official gold reserves increased by 290 tons, the highest purchasing scale of central banks in the first quarter since the statistics.
The People's Bank of China remains the largest buyer in the gold market. The Report shows that China's official gold reserves will continue to grow in 2024. In the first quarter, China's official gold reserves increased by 27 tons to 2262 tons. With the help of soaring gold prices, gold now accounts for the majority of Chinese people bank 4.6% of the total foreign exchange reserves, the highest level in history.
It is worth noting that China's official gold reserves have increased for 17 consecutive months. Since November 2022, when China announced again to increase gold reserves, the announcement of the People's Bank of China on purchasing gold has never stopped. The official gold reserves have increased by 314 tons in total, and the total value of gold reserves has increased by 44% over the same period in US dollars. In comparison, the central bank's total foreign exchange reserves denominated in US dollars increased by 5% during this period.
Industry insiders said that under the circumstances of market fluctuations and higher risks, the global central bank continued to buy a large amount of gold, highlighting the important role of gold in the international reserve portfolio.
Louise Street, a senior market analyst of the World Gold Council, pointed out that the behavior trend of East and West investors is changing. Generally, investors in the eastern market are more sensitive to changes in gold prices and tend to buy on the cheap, while western investors tend to be attracted by the upward trend of gold prices and tend to chase higher prices. However, in the first quarter of this year, the above situation has changed. With the soaring gold price, the investment demand in China, India and other markets has increased significantly.
Looking ahead, she believes that according to the recent performance of gold, the return rate of gold in 2024 may be much higher than expected at the beginning of the year. If prices tend to stabilize in the next few months, some price sensitive buyers may re-enter the market. While waiting for interest rate cuts and clear election results, investors will continue to regard gold as a good safe haven asset.
Investment in gold bars, gold coins and gold ETFs surged
The Report shows that in the first quarter, China's demand for gold bars and coins was 110 tons, a 68% year-on-year surge, the strongest performance in the first quarter since 2013.
Industry insiders said that in the first two months of this year, the weakness of the RMB, people's concerns about the real estate market and the volatility of the stock market (mainly in January) continued to push up the demand of domestic investors for asset preservation, thus stimulating the sales of gold bars and coins. The sharp rise in the new deposits of residents also reflects the general caution of domestic investors. The rise of gold price in March was eye-catching, which increased the interest of domestic investors in physical gold. In addition, the continuous decline of domestic interest rates and the gift demand around the Spring Festival holiday also contributed to the demand for gold bars and coins.
The above industry insiders also pointed out that the domestic retail investment demand for gold may still maintain a healthy level in the coming quarters. In order to support the economy, expand domestic demand and boost confidence, the domestic sound and appropriate monetary policy may further reduce interest rates, and against the background of the decline in local opportunity costs, the attractiveness of gold is expected to increase.
In addition, the Report shows that in the first quarter, the gold ETF inflow in the Chinese market totaled 2.8 billion yuan (about US $390 million), and the AUM reached a new high of 35 billion yuan (about US $5 billion). The Report believes that despite the modest recovery of the stock market, gold prices jumped by 10%, other major domestic assets performed poorly and other factors led to a sustained net inflow of gold ETFs in the Chinese market. In addition, the monthly distribution of inflow is relatively uniform, indicating that the surge of gold price in March was not the only driver of inflow in the first quarter.
The data also showed that by the end of the first quarter, the total holdings of gold ETFs in the Chinese market had reached 67 tons, up 10% quarter on quarter; Due to the soaring gold price of RMB, the total asset management scale (in RMB) has jumped by 20%.
It is worth noting that the enthusiasm of gold ETF investors in the Chinese market lasted until April. In the first three weeks of April alone, the total position increased by more than 20 tons, which was the fastest growth month on record.
Another insider said that in the long history, gold was a hedge against the credit currency represented by the US dollar. Whenever the credit of the credit currency, especially the US dollar, declined, the price of gold would rise sharply, including the oil crisis and the 911 incident. At present, as the US fiscal deficit continues to increase, the Russia Ukraine war challenges the existing geopolitical pattern, investors are increasingly worried about global geopolitical tensions, and the continued volatility of local assets, all of which attract investors to continuously increase their positions in gold ETFs.
(Source: China Fund News)
(Original title: Buy! Buy! Buy! Investment surge)
Safe, fast and guaranteed futures account opening on Sina cooperation platform
Massive information, accurate interpretation, all in Sina Finance APP
Editor in charge: Shi Xiuzhen SF183
