Latest news with #WGC
Gulf Business
3 hours ago
- Business
- Gulf Business
World Gold Council: Gold prices rise 26% in H1; see outlook for H2
Image: Getty Images/ For illustrative purposes Gold surged 26 per cent in the first half of 2025, notching 26 all-time highs and outperforming major asset classes as investors flocked to the safe-haven metal amid a weaker US dollar, stagnant bond yields, and mounting geopolitical tensions, according to the The WGC report, titled 'Downhill or Second Wind?' , explores whether gold has peaked or still has room to run in the second half of the year. It projects that gold could rise a further 0 per cent to 5 per cent under current consensus expectations. However, deteriorating macroeconomic conditions, including stagflation or recession, could drive gold prices up another 10 per cent to 15 per cent, while widespread conflict resolution may lead to a 12 per cent to 17 per cent decline. 'Gold has continued its record-setting pace, rising across all major currencies, and showing remarkable strength in the face of a volatile global backdrop,' the WGC report stated. Strong demand, ETF flows H1 2025 saw average daily gold trading volumes reach a record $329bn, bolstered by robust over-the-counter activity, exchange-based trading, and renewed inflows into gold-backed ETFs. Global ETF assets under management surged 41 per cent to $383bn, with holdings rising by 397 tonnes to 3,616 tonnes – the highest since August 2022. Central banks maintained strong buying momentum, though slightly below record levels, continuing the trend of diversification away from U.S. dollar holdings. The WGC's attribution model indicates that opportunity cost factors, such as a weakening dollar and stagnant yields, contributed 7 per cent to gold's return, while risk and uncertainty added 4 per cent. Dollar falters, gold gains The 'Trade-related geopolitical risks played a large role, not just directly, but by fuelling moves in the dollar, interest rates, and broader market volatility – all of which fed into gold's appeal,' the report noted. H2 scenarios: range-bound or breakout? Consensus forecasts suggest below-trend global growth and persistently high inflation in the second half, with US CPI expected to reach 2.9 per cent. The Federal Reserve is anticipated to cut interest rates by 50 basis points by year-end. Under this base case, gold is expected to consolidate with potential modest gains. The WGC warns that more severe scenarios – such as intensified stagflation, recession fears, or escalated geopolitical tensions – could prompt a stronger rally. Conversely, a return to economic stability and easing geopolitical risks could lead to reduced investment flows into gold and a steeper pullback. Even in a bearish scenario, however, the WGC sees $3,000/oz as a natural support level, noting that lower prices could revive consumer demand and discourage recycling. Outlook: Structurally resilient While the report acknowledges the unpredictable nature of the global macro environment, it concludes that gold remains well-positioned as a strategic asset. 'Given the intrinsic limitations of forecasting the global economy, we believe gold – through its fundamentals – remains well positioned to support tactical and strategic investment decisions in the current macro landscape,' it said. At the end of June, gold stood at $3,287/oz, with a record high of $3,434 reached on June 13.
Mint
3 hours ago
- Business
- Mint
Gold likely to remain rangebound in H2, to close up to 5% higher: World Gold Council
Gold price today: Gold ended the first half of the year as one of the best-performing major asset classes, recording a 26 per cent gain during the period. The surge in gold was led by couple of influential factors - A weaker US dollar played a central role, making dollar-denominated assets like commodities more attractive to global investors. Simultaneously, bond yields remained rangebound as markets began pricing in the possibility of future interest rate cuts by the Federal Reserve, fueling optimism for a more accommodative monetary stance. Adding to the complexity were heightened geopolitical tensions—many of which stemmed directly or indirectly from US trade policies—contributing to global uncertainty and prompting a shift toward safer investment avenues. According to Gold Mid-Year Outlook 2025 report by World Gold Council (WGC), a stronger demand also came from increased trading activity across OTC markets, exchanges, and ETFs. Gold ETF demand was particularly strong in the first half of the year, led by notable inflows from all regions. By the end of H1 the combination of a surging gold price and investor flight to safety pushed global gold ETF's total AUM 41 per cent higher to $383 billion, as per the report. ' Total holdings rose by an impressive 397t (equivalent to US$38bn) to 3,616t – the highest month-end level since August 2022,' the report read. As per the WGC report, gold could remain rangebound in H2, closing roughly 0 per cent–5 per cent higher than current levels. ' Technical indicators suggest that gold's consolidation phase over the past few months is a healthy pause in a broader uptrend, helping to ease previous overbought conditions and potentially setting the stage for renewed upside,' it said. The report further said that the falling interest rates and continued uncertainty would maintain investor appetite, particularly via gold ETFs and OTC transactions. At the same time, central bank demand is likely to remain robust in 2025, moderating from its previous records while staying well above the pre-2022 average of 500-600t. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
CNBC
13 hours ago
- Business
- CNBC
Central banks are increasingly buying gold from local mines as prices surge
Central banks are increasingly looking to bolster their gold reserves. And they are turning to mines in their backyard to source the yellow metal. Besides being cheaper, securing gold directly from mines helps support local industry and bolsters reserves without weighing on foreign exchange reserves, experts said. While countries such as the Philippines and Ecuador have been doing this for years, more central banks with access to domestic gold mines have started, increased, or are considering direct local purchases, according to the World Gold Council. Nineteen out of 36 respondents in the World Gold Council's latest central bank survey said they are buying gold directly from domestic artisanal and small-scale gold miners in local currency. Four are thinking of following suit. This is a slightly higher figure than last year's survey, when around 14 central banks out of 57 said they were buying directly from domestic sources. "One trend that we're seeing is that some central banks, especially in Africa, Latin America, are starting to buy gold directly from domestic, small-scale gold mines, which have really proliferated because of the higher price," said Shaokai Fan, global head of central Banks at WGC. Central banks of Colombia, Tanzania, Ghana, Zambia, Mongolia and the Philippines are relying on domestically mined gold to build up reserves, according to the industry body. Ghana Gold Board — the state agency managing gold purchases on behalf of the Bank of Ghana — in April secured agreements with several mining companies to buy 20% of their gold output, Reuters reported. Last September, Tanzania's mining authority reportedly mandated that all gold exporters, including miners and traders, put aside at least 20% of their output to sell to the central bank. "You can make an argument that it's cheaper than buying gold on the international market, because a lot of these central banks buy gold at a slight discount to the international price," Fan said. Traditionally, central banks acquire gold through the global over-the-counter market — typically centered in London — where gold is transacted via major bullion banks, priced in U.S. dollars, euros, or sterling. These purchases often involve high-purity London Good Delivery or LGD bars, which meet global trading standards and are stored in top-tier vaults such as those at the Bank of England. Because of gold's soaring prices and its attractiveness as a hedge against geopolitical risks, it is natural that the central banks of producer nations would turn to domestic output, said Adrian Ash, director of research at gold investment firm BullionVault. Gold prices have been on a tear, scaling fresh highs amid geopolitical uncertainties and waning confidence in other traditional safe havens. Spot gold prices are currently trading at $3,328.3 per ounce, up almost 27% year to date, data from LSEG showed. Buying domestic mine output saves on banking and intermediary fees, as well as shipping costs. However, countries need to pay for processing and refining the metal to LGD standard — the de facto international benchmark for large gold bullion. These processes need to be done overseas if the country doesn't have domestic LGD refining, which will add costs, Ash said. Central banks that buy gold bars from local mines and have domestic LGD refining capacity, nullify those additional costs. The Philippines' central bank, for instance, is a certified LGD refiner. Kazakhstan has two refiners accredited by the London Bullion Market Association. Russia had seven until they were suspended in 2022 after the country invaded Ukraine. Others such as Ghana and Zambia might need to rely on external refiners, offsetting part of the upfront savings. Another compelling driver for buying domestic gold is monetary flexibility. Purchasing gold through the international market often requires dollars — a reserve asset. That means central banks must swap one reserve for another. But that won't be the case if they use local currencies to buy gold from their own backyard. "You're able to grow your reserves using local currency and therefore not sacrifice another reserve asset to grow your gold reserves," said WGC's Fan. With rising global debt levels, trade and geopolitical risks on the cards, central banks want to strengthen their reserve buffers to shield against sudden financial shocks. Holding more reserves — in multiple forms — provides ammunition to manage potential crises. Out of the 73 central banks surveyed by the WGC, around 95% said they expect peers across the world to raise gold reserves over the next year. In the past, if these central banks wanted to buy gold, they would probably just purchase it on the international market, Fan explained. "But if you have local gold production in your country, a lot of central banks are thinking, well, maybe we can use this local gold production instead and add the reserves this way," he added. Providing support for domestic mining sectors and respective local communities are also key drivers for central banks purchases via local mines. Demand for gold in some countries is too small, and central banks are incentivized to support mining operations in the country, which in turn generates jobs, said Nicky Shiels, head of research and metals strategy at MKS PAMP. Shiels, however, noted that purchasing gold via local mines comes with risks. Central bank purchases through international markets often via leading bullion banks offer greater trust and minimize reputational risks for central banks, she said. Much of the gold being bought domestically comes from artisanal and small-scale gold mining — ASGM has been linked with poor labor practices, environmental damage, and illegal smuggling. But it can also be argued that central banks, with their institutional credibility and financial weight, are in a good position to formalize and clean up that supply chain, said WGC's Fan. "Central banks can harness their massive buying power to do good for these artisanal, small scale miners," he said. "Having a credible, large-scale buyer like the central bank gives small-scale miners a legal and fair outlet to sell their gold," said Fan. "That not only diverts flows away from criminal networks but also improves traceability and accountability." "That's exactly how we describe it as — a win-win."
Economic Times
2 days ago
- Business
- Economic Times
Gold prices may soften mid-term if global risks ease, says World Gold Council
Synopsis The World Gold Council suggests gold prices might weaken if geopolitical and trade tensions ease, or if the US dollar and Treasury yields increase. Reduced central bank gold purchases and retail investment could also trigger a mid-term price correction. ET Online Representational Gold price may experience e mid-term weakness if geopolitical and trade risks globally ease, or higher opportunity costs if the US dollar and Treasury yields rise, according to a report released by the World Gold Council. Slowing central bank gold purchase and retail investment demand could also lead to mid-term gold price adjustment, WGC prices were hovering around Rs 97,511 per 10 gm last Friday. Gold's recent bull run has attracted tremendous attention. After bottoming on 3 November 2022, the gold price has more than doubled from US$1,429/oz to US$3,287/oz, equivalent to a 30% compound annual growth has been supported by consistent central bank purchases as well as soaring geopolitical and, more recently, trade risks; all this has dwarfed the negative impact from rising real rates amid rate hikes by central banks and cooling inflation between November 2022 and August the gold price has continued to break new highs, investors have become wary of potential risks. And we have studied previous bear runs for gold and analysed the factors that could lead to mid- or longer-term pullbacks, based on historical patterns. "While we don't consider these likely, longer-term pullbacks could come from more persistent and structural demand shifts which may lead to notable declines in gold's investment demand from both institutions and retail investors as well as rapid rises in supply." WGC said in the report.
Time of India
3 days ago
- Business
- Time of India
Gold prices may soften mid-term if global risks ease, says World Gold Council
Gold price may experience e mid-term weakness if geopolitical and trade risks globally ease, or higher opportunity costs if the US dollar and Treasury yields rise, according to a report released by the World Gold Council. Slowing central bank gold purchase and retail investment demand could also lead to mid-term gold price adjustment, WGC added. Gold prices were hovering around Rs 97,511 per 10 gm last Friday. Gold's recent bull run has attracted tremendous attention. After bottoming on 3 November 2022, the gold price has more than doubled from US$1,429/oz to US$3,287/oz, equivalent to a 30% compound annual growth has been supported by consistent central bank purchases as well as soaring geopolitical and, more recently, trade risks; all this has dwarfed the negative impact from rising real rates amid rate hikes by central banks and cooling inflation between November 2022 and August 2024. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like ¡Kit alarma con cámara Wi-Fi: ¡Precio increíble por tiempo limitado! Verisure Alarmas Leer más Undo As the gold price has continued to break new highs, investors have become wary of potential risks. And we have studied previous bear runs for gold and analysed the factors that could lead to mid- or longer-term pullbacks, based on historical patterns. "While we don't consider these likely, longer-term pullbacks could come from more persistent and structural demand shifts which may lead to notable declines in gold's investment demand from both institutions and retail investors as well as rapid rises in supply." WGC said in the report. Live Events
