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Retail investment demand for gold bars and coins as well as central bank purchases pushed global gold demand up 28 percent to 1,181.5 tonnes in the September quarter, according to the World Gold Council report.
Total global demand stood at 921.9 tonnes during the fourth quarter of July-September 2021, the World Gold Council’s “Gold Demand Trends Q3 2022” showed on Tuesday.
Investing fell 47 percent year-on-year as Exchange Traded Fund (ETF)-backed investors responded to a challenging combination of higher interest rates and a strong US dollar with significant outflows of 227 tonnes. The outflow was the largest since the second quarter of 2013.
ETF outflow during the third quarter of 2021 was only 26 tonnes, the report said.
However, bar and coin investment jumped 36 percent year-on-year in the September quarter to 351.1 tons compared to 258.9 tons last year.
The bar and coin sector had its strongest third quarter since 2011, mainly as rising global inflation levels fueled demand across most markets, with additional momentum generated by weakening gold prices July-September, the report said.
The average price of gold declined by 7.59 percent sequentially during the third quarter of 2022 to USD 1,728 an ounce compared to USD 1,870 during the April-June period this year, Somasundaram PR told PTI.
According to the report, in the September quarter, central bank purchases reached an all-time quarterly record of 399.3 tonnes compared to 90.6 tonnes in the same period of 2021.
Turkey remained the largest reported gold buyer this year adding 31 tonnes in the third quarter followed by Uzbekistan buying 26 tonnes and Qatar 15 tonnes during July-September.
According to the report, the Reserve Bank of India (RBI) continued its long-term gold buying strategy in the third quarter and bought 13 tonnes in July and 4 tonnes in September, pushing its gold reserves to 785 tonnes.
Jewelery consumption continued to rebound and has now returned to pre-pandemic levels, increasing by 10 percent to reach 523.1 tonnes compared to 476.5 tonnes in the same period of 2021, it said.
The report noted that much of this growth was led by India’s urban consumers, who raised demand by 17 percent year-on-year to 146.2 tonnes.
Similarly, growth was also seen in much of the Middle East, with Saudi Arabian jewelery consumption up 20 per cent from the third quarter of 2021, and the United Arab Emirates up 30 per cent over the same period.
Meanwhile, Chinese jewelry demand saw modest 5 percent year-on-year growth driven by improved consumer confidence and a decline in the local gold price, prompting the release of some pent-up demand.
As for supplies, the report showed that it increased by 1 percent to 1,215.2 tons during the September quarter compared to 1,208.2 tons in the same period last year.
Mine output increased by 2 percent versus the same period in 2021, with gold mining witnessing its sixth consecutive quarter of growth.
However, recycling was 6 percent lower yoy in the September quarter at 275.8 tonnes versus 292.8 tonnes last year, as consumers held on to their gold in the face of rising inflation and an uncertain economic outlook.
”Despite a shaky macroeconomic environment, demand this year reflected gold’s status as a safe haven asset, underlined by the fact that it outperformed most asset classes in 2022.
”Looking ahead, we anticipate that central bank buying and retail investment will remain strong and this could help offset potential declines in OTC (Over The Counter) and ETF investment that may prevail if dollar strength continues,” WGC Senior Markets Analyst Louise Street. said
WGC also expects to see jewelry demand continue to perform strongly in some regions such as India and Southeast Asia, she added.
(This story has not been edited by Devdiscourse staff and is automatically generated from a syndicated feed.)
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