Gold Demand Jumps In Q3 On Global Economic Uncertainty

India gold store zaveri bazaar

Photo: Mamta Badkar

Gold demand in the third quarter jumped 6% to 1,053.9 tonnes, compared to a year ago. In dollar terms, this was an all-time high of $57.7 billion, according to The World Gold Council.Growth was driven by a jump in investment demand which rose 33% to 468.1 tonnes. However, global demand for gold jewellery fell 10% 465.6 tonnes. Marcus Grubb, managing director of investment at the World Gold Council:

“Unsurprisingly investment demand for gold was a key driver during the third quarter.

Increasing levels of inflation, the US credit rating downgrade, a worsening eurozone sovereign debt crisis and the lacklustre performance of many assets drove investors to increase holdings in gold in order to protect their wealth. Given gold’s proven risk mitigation properties, it is likely that investors will continue to seek protection from economic uncertainty, which shows no signs of abating.”

Here are some more details from the report:

  • Net purchases by central banks are at a 40-year high, rising to 148.4 tonnes in the third quarter. 
  • Investment in Europe increased 135% year-on-year (YoY) to a record quarterly value of  €4.6 billion. Nearly all markets saw double-digit growth in demand for gold bars and coins.
  • China which is the second largest gold consumer in the world saw jewelry demand rise 13% year-on-year at 131 tonnes equating to 46 billion yuan. Investment boosted demand for gold bars and coins by 24% YoY.
  • India, the world’s largest gold consumer however saw sluggish demand for gold because of high inflation and greater volatility in gold prices. Indian jewelry demand fell 26% in tonnage to 125.3 tonnes. But demand for the year ending September was close to record levels.
  • Gold ETFs and similar products saw inflows of 77.6 tones in the third quarter, 58% higher than a year ago.

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