These data from the World Gold Council (WGC) can be explained by the tightening of the Fed's monetary policy, which led to the strengthening of the US currency. In addition, the initial shock from the Ukrainian crisis has passed, the price of gold has fallen, so institutional investors have taken profits.
In the second quarter of this year, Central Banks purchased almost 180 tons of gold, doubling the amount quarterly. In just six months, they purchased 270 tons of precious metal. Large buyer countries were Turkey (63 tons), Egypt (44 tons), Iraq (34 tons), India (15 tons), Ireland (3 tons), Ecuador (3 tons). Note that the Central Bank of the Czech Republic plans to increase the volume of the country's gold reserves from 11 to 100 tons and more, thus repeating the history of large acquisitions from Poland and Hungary.
Demand for investment gold coins amounted to 71.4 tons, which is 9 tons more compared to the same period last year. In Russia, demand for bars and coins reached 5.5 tons in Q2, down 1 ton QoQ but up almost 300% compared to Q2 2021. No other country in the world had such an increase. In general, the Russians bought 12 tons of physical investment gold in the first six months. That's more than the last 2 years combined. It can already be argued that the current year will be a record year in this respect for Russia. Global demand for investment gold bars amounted to 157.2 tons, down from 179 tons in the first quarter. First of all, this is due to the consequences of quarantine restrictions imposed in large cities in China.
At the same time, the demand for gold from the jewelry industry increased by 6% to 484.3 tons, mainly due to India and China. However, gold exchange-traded funds reported an outflow of shares in the amount of 38.8 tons. Recall that in the first quarter these institutional investors purchased 272.7 tons of gold. In the technology sector, the indicator also decreased, namely by 2%, to 78.4 tons, as they began to buy less consumer electronics.
The indicator in the context of the proposal increased by 5%, amounting to 1192.7 tons. Production increased to 911.7 tons, up 4% year on year. The level of processing also increased, reaching 291.1 tons, which is 5% more compared to the same period last year.
Given the turbulent geopolitical situation, rising inflation and the prospect of a recession in the leading countries of the world, the demand for gold has every chance to increase in the second half of 2022.