Rising investor gold demand offsets lower jewellery buying in Q3, says industry body
Gold jewellery consumption down 12% amid high prices
Demand from central banks is weakening, down 49% in Q3
Including OTC, total gold demand rose by 5% in Q3
Mine supply hit Q3 record, recycling rose by 11%
By Polina Devitt
LONDON, Oct 30 (Reuters) -Global gold demand excluding over-the-counter (OTC) trading was steady year-on-year at 1,176.5 metric tons in the third quarter as higher investment activity offset reduced jewellery consumption, the World Gold Council (WGC) said on Wednesday.
Spot gold prices XAU= are up 34% so far this year, heading for the highest annual growth since 1979, due to uncertainty surrounding next week's U.S. presidential election, lower interest rates, geopolitical risks and portfolio diversification. Gold hit a record of $2,771.61 per ounce on Tuesday.
"Resurgent professional flows combined with solid bar and coin investment will offset weaker consumer demand and slower central bank buying" for gold in 2024, the WGC, an industry body whose members are global gold miners, said in a quarterly report.
Total demand for gold, including opaque OTC trading, rose 5% to 1,313 tons, a record for a third quarter, the WGC said. It estimates the OTC flows - investment from institutional, high-net-worth investors and family offices - at 136.5 tons in July-September, up 97%.
Physically-backed gold exchange traded funds (ETFs) saw the first positive quarter since the first quarter of 2022 with inflows of 95 tons, while bar and coin investment fell 9%.
Gold jewellery consumption, the biggest category of physical demand, fell by 12% in the third quarter despite strong growth in major import market India, while global central banks, which actively bought gold in 2022-2023, reduced purchases by 49%.
On the supply side, mine production increased by 6% to reach a third-quarter record, and recycling rose by 11%.
Gold supply and demand by WGC*:
Q3'23 | Q2'24 | Q3'24 | Q3 change y/y (%) | |
Supply | ||||
Mine production | 935.7 | 907.0 | 989.8 | 6 |
Net producer hedging | 23.8 | 8.5 | 0.2 | -99 |
Recycled gold | 290.1 | 336.4 | 323.0 | 11 |
Total supply | 1,249.6 | 1,251.9 | 1,313.0 | 5 |
Demand | ||||
Jewellery fabrication: | 582.2 | 408.2 | 543.3 | -7 |
- Jewellery consumption | 520.0 | 390.9 | 458.6 | -12 |
- Jewellery inventory | 62.1 | 17.2 | 84.6 | 36 |
Technology: | 77.3 | 80.2 | 83.0 | 7 |
- Electronics | 63.3 | 66.9 | 69.0 | 9 |
- Other industrial | 11.7 | 11.1 | 11.8 | 1 |
- Dentistry | 2.3 | 2.3 | 2.2 | -4 |
Investment: | 156.8 | 266.1 | 364.1 | 132 |
- Total bar and coin: | 295.9 | 273.2 | 269.4 | -9 |
of which bars | 207.7 | 198.4 | 198.4 | -4 |
of which official coins | 54.3 | 49.6 | 31.3 | -42 |
of which medals | 34.0 | 25.3 | 39.8 | 17 |
- ETFs/similar products | -139.1 | -7.1 | 94.6 | - |
Central banks, other inst. | 363.9 | 202.2 | 186.2 | -49 |
Gold demand | 1,180.2 | 956.7 | 1,176.5 | 0 |
OTC and other | 69.4 | 295.2 | 136.5 | 97 |
Total demand | 1,249.6 | 1,251.9 | 1,313.0 | 5 |
LBMA gold price ($/oz) | 1,928.5 | 2,338.2 | 2,474.3 | 28 |
*Source: ICE Benchmark Administration, Metals Focus, World Gold Council.
WGC 2024 gold demand forecast as of Q3 https://tmsnrt.rs/4hlYIeF
WGC Q3 gold demand https://tmsnrt.rs/3UqAt4Y
Reporting by Polina Devitt; editing by Barbara Lewis
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