Global gold demand shifts from West to East

What happened: France repatriated its last US-based gold reserves, totaling $15 billion, in a move that began in 2015. This follows a trend of European countries bringing their gold back home. Meanwhile, gold demand during India's second-biggest gold-buying festival remained muted due to record prices, with jewellery purchases offsetting a modest increase in investment demand.

Market impact: This narrative shifts global gold demand dynamics. France's repatriation reduces the gold supply in the US, potentially increasing demand and prices. Conversely, subdued Indian demand, a key consumer, could temper price gains. This dynamic impacts gold miners and refiners, such as Barrick Gold and Metalor, and gold ETFs like SPDR Gold Shares.

What to watch next: Keep an eye on the following catalysts: 1) China's gold imports data, due quarterly, to confirm UBS's expectation of persistent demand; 2) Indian gold demand during the upcoming Akshaya Tritiya festival, a key buying period, to gauge consumer sentiment; 3) Central bank gold purchases, particularly from European countries, to monitor any further repatriation trends.