Core Insights - The global gold market experienced a significant increase in demand value, reaching a record $132 billion in Q2 2025, despite only a 3% increase in demand volume year-on-year [2] Group 1: Investment Demand - The primary driver of increased gold demand in Q2 was the investment sector, with both institutional investors and retail investors participating actively [3] - Global gold ETFs saw a substantial inflow, with holdings increasing by 170 tons in Q2 and a total of 397 tons in the first half of the year, marking the strongest performance since 2020 [3] - Retail demand for gold bars and coins rose by 11% year-on-year, with China and Europe being the main contributors, particularly China, where demand reached 115 tons, amounting to over 83 billion RMB [3][4] Group 2: Jewelry Demand - In contrast to investment demand, global gold jewelry demand fell by 14% year-on-year to 341 tons, while the monetary value of jewelry consumption increased by 21% to $36 billion [5] - The decline in jewelry volume is attributed to rising gold prices, with the average price in Q2 reaching $3,280 per ounce, a 40% increase year-on-year [6] - Consumers are increasingly viewing jewelry as an investment rather than a luxury item, with trends such as "old for new" exchanges and using jewelry as collateral for loans becoming more common [6] Group 3: Central Bank Purchases - Central banks globally net purchased 166 tons of gold in Q2, a decrease of 33% from the previous quarter, marking the lowest level since 2022 [7] - The slowdown in purchases is attributed to high gold prices, as central banks act rationally and avoid buying at peak prices [7] - Despite the decrease, the current purchasing levels are still 41% higher than the average quarterly levels from 2010 to 2021, indicating a sustained long-term interest in gold [7][8] Group 4: Future Outlook - Key variables to monitor for the gold market in the second half of the year include the performance of the US dollar, technological demand for gold, and potential changes in gold recycling rates [9] - The anticipated weakening of the dollar could lower the opportunity cost of holding gold, potentially attracting more investment [9] - The demand for gold in technology, particularly related to AI, may present new growth opportunities despite a general decline in technological gold usage [9] Group 5: Gold as a Safe Haven - Gold is viewed as a tool for managing uncertainty, serving as a risk diversification asset for institutions, a safety net for central banks, and a stabilizing component for individual investors [11] - The dynamics observed in the gold market reflect broader economic uncertainties and the varying strategies of different market participants in safeguarding their assets [11]

Core Viewpoint - The recent decline in gold prices, which fell by 6% from April 22 to May 14, has raised concerns among investors and consumers, despite a significant increase in gold purchases earlier in the year [1][4]. Group 1: Market Trends - Gold fund transaction volume reached approximately 190 billion, with a 6% price drop during the same period [1]. - Gold stocks experienced a more significant decline, dropping over 8% [1]. - Retail sales of gold and jewelry increased by 11% year-on-year, with gold bar and coin purchases rising by 30% [3]. Group 2: Regional Disparities - Retail sales of gold and jewelry in Beijing grew by 29% year-on-year, while Guangzhou saw a 15% increase, both exceeding the national average [4]. - In contrast, Shanghai's retail sales for the same category declined by 9% [4]. Group 3: Factors Influencing Gold Prices - The decline in gold prices is attributed to reduced safe-haven demand, a stronger US dollar, decreased expectations for Federal Reserve rate cuts, profit-taking by speculators, and a slowdown in central bank gold purchases [6][10]. - Despite the current price drop, it remains above the levels seen in the first quarter, indicating that investors are not yet at a loss [4]. Group 4: Future Outlook - Research institutions express caution, noting an increase in hedging by gold producers and a decline in recycled gold after eight consecutive quarters of growth, suggesting a higher likelihood of price adjustments [12]. - However, there is optimism regarding the long-term support for gold prices due to the ongoing contraction of US dollar credit [12].