Rising investor gold demand offsets lower jewellery buying in Q3: WGC

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 are up 34 per cent so far this year, heading for the highest annual growth since 1979, due to uncertainty surrounding next week's US 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 per cent 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 per cent.

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 per cent.

Gold jewellery consumption, the biggest category of physical demand, fell by 12 per cent 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 per cent.

On the supply side, mine production increased by 6 per cent to reach a third-quarter record, and recycling rose by 11 per cent.