Global demand for gold is declining, with buyers in India and China continuing to pare purchases due to weak global growth.
Financial Times reports the halt in consumption is driving down prices and depressing the profits of gold miners like Barrick Gold and Newmont, as well as hedge fund managers.
Read: Foreign investors reducing Canadian holdings
Demand for the metal fell to 990 tones during Q2, the lowest level recorded in the last few years.
Read: Global investors reject gold
But, Wall Street Journal says gold trading is steady for the time being; continuing to trade in range as it looks for fresh cues from central banks regarding stimulus measures.
They claim, “Investors continue to play the ‘will they-won’t they’ game with central bank policy decisions, but are unwilling to push gold out of its $1,590-$1,630 per ounce range, ANZ analysts said in a report.”
Consumers expect increased liquidity when stimulus measures are put in place, creating bullish sentiment and renewed belief in gold as a solid hedge against inflation.
Read: Not worth the risk and Gold juniors struggle to secure financing