Gold Price and Demand Dynamics
✅ Gold demand is driven from three main sources – jewelry, industrial and medical applications, and investment.
✅ Data for the last 8-10 years suggests that gold prices have largely trended in line with demand for the metal.
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✅ Although jewelry still accounts for the largest contributor of gold demand, its share has declined from over 80% at the start of the century to less than 50% currently.
✅ At the same time, investment demand for gold (as a hedge) gradually increased since the emergence of the global financial crisis and run up in gold prices.
What Lies Ahead?
✅ Considering the volatility in gold prices over the last 50 years, it is anybody’s guess how the prices could move.
✅ Though the general market consensus seems to suggest that we could see a further upswing in gold prices in the near term.
✅ The primary drivers for a bullish view include higher retail and institutional investment, increased gold buying by major central banks over the world due to a possibility of a global economic slowdown, and prospects of a truce in US-China trade tensions.
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