World Gold Council expects metal demand, prices to stay strong

Financial market uncertainty and accommodative monetary policy will continue to support gold investment demand in the short term, a study published Thursday by the World Gold Council (WGC) shows.

In its mid-year gold outlook for 2019, the industry body says that price momentum (gold is up 11% so far this year) and structural economic reforms in India and China will also be key drivers of demand for the precious metal. 

Signs of increasingly-dovish monetary policy from central banks across the globe has significantly supported gold as of late. Aside from the 247 tonnes those institutions have bought directly through May, market expectation that the US Federal Reserve will lower interest rates two or three times later this year should continue encouraging demand, the WGC reports.

And while the Fed may not do what the market asks, it generally doesn’t like to surprise it either, the WGC says.

Jewellery continues to be the main driver of consumer’s demand for gold.

Gold has already become one of the best-performing assets this year, and bullion-backed exchange traded funds have captured $5 billion, it notes.

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