The demand for this bullion in our part of Europe is 12% higher than last year.

Information released by the World Gold Council (WGC) shows that over the past three months Russians purchased more than 5.5 tons of gold. This means an increase in demand for bullion in the country by as much as 293% compared to the same second quarter from last year. According to the management board of Mennica Skarbowa, the increase in demand for gold in Russia is mainly likely to be the result of the ongoing war with Ukraine as well as sanctions imposed on the country by most of the Western world. In our part of Europe, gold demand was more than 12% higher compared to second quarter of 2021.

The World Gold Council has released information on demand and prices for bullion on global markets in the second quarter of 2022. According to data released by the organization, global demand for physical investment gold in the form of bars and bullion coins reached 245 tons in the second quarter of 2022 – the same as in the same period in 2021. However, this result represents a 13% decline in global demand compared to the first quarter of 2022, which was significantly impacted by the weak state of the Chinese market.

The situation in the various global markets was uneven, with China experiencing a significant (35%) decline in demand compared to the second quarter of 2021, and a 24% drop from the previous quarter, undoubtedly influenced by the strict policies pursued to contain the COVID-19 virus. The lockdowns, which were imposed in several key cities and regions, were in place for most of the second quarter and cut off some consumers’ access to retail stores. However, this situation was offset globally by an increase in demand for gold bars and coins, which was observed in India (20% compared to Q2 2021), Pakistan (32%) and Turkey (132%). In the United States, demand for gold bars and coins remained at levels similar to the second quarter of 2021. In Russia, demand for physical investment gold remains at a high level (5.5 tons) and indicates an increase of as much as 293% compared to the same quarter last year.

“Gold investment is a long-term venture which will pay off in 10 or 15 years. The supply for this bullion increases especially in moments of economic crises, high inflation but also armed conflicts. Thus, it is likely that the Russians, as a result of the conduct of the war with Ukraine, have thrown themselves into gold. Gold coins and small bars are easy to sell later or to exchange for other goods, for example. An embargo on Russian gold has also been in effect since late June. Sanctions have been imposed by four G7 countries: the US, Canada, the UK and Japan. Poles are also still keen to invest in gold, despite increasingly attractive bank deposits. An investment in this bullion can start with as little as a few hundred zlotys or a few thousand, while buying a plot of land or an apartment is an expense of at least several hundred thousand zlotys. Also, not everyone wants to invest in the stock market or cryptocurrencies. Meanwhile, bank deposits with an interest rate of 7% mean a loss on capital with inflation of more than 15%. Gold seems to be a good alternative for people who want to acquire an easily tradable asset and invest for the long term. “ Jaroslaw Zolędowski, president of Mennica Skarbowa, says.

According to data from the World Gold Council, despite a 14% decline compared to the previous quarter, demand for investment gold in Europe remains at a high level – 68 tons. As for individual European markets, despite a 10% decline from the previous quarter, Germany was again the strongest, with demand at 41 tons, which is an 8% decline from the second quarter of 2021.

The smaller European markets (known as Other Europe, which includes Poland) noted a cumulative result of 7.9 tons, representing a 13% drop in demand for physical investment gold from the previous quarter, but a 12% increase over the second quarter of 2021.

The gold price averaged $1,871/oz in the second quarter, 3% higher than the average in the second quarter of 2021. However, it declined compared to the first quarter of 2022 (6%) but strengthened slightly in the first half of the year (+1%). Second-quarter weakness depended on the volatile value of the dollar – the gold price varied depending on which currency it was denominated in.