Gold demand was 964.3t in Q3, just 6.2t higher y-o-y. Robust central bank buying and a 13% rise in consumer demand offset large ETF outflows.

Bar and coin demand jumped 28% to 298.1t as retail investors took advantage of the lower gold price and sought protection against currency weakness and tumbling stock markets. Jewellery demand rose 6% in Q3 as lower prices caught consumers’ attention. A growing number of central bank buyers saw demand in this sector rise 22% y-o-y to 148.4t, the highest level of quarterly net purchases since 2015. Technology registered its eighth consecutive quarter of y-o-y growth, up 1%. Sharp outflows in gold-backed ETFs offset growth across much of the gold market.

 

Strong central bank and consumer demand offset ETF outflows

Strong central bank and consumer demand offset ETF outflows

Data as of

Sources: Metals Focus, World Gold Council; Disclaimer

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Bar and coin investors took advantage of the price dip; demand rose 28% y-o-y. Stock market volatility and currency weakness also boosted demand in many emerging markets. China – the world’s largest bar and coin market – saw demand rise 25% y-o-y. Iranian demand hit a five-and-a-half year high. 

Q3 jewellery demand saw price-led y-o-y growth of 6%. Lower gold prices during July and August encouraged bargain hunting amongst price-sensitive consumers. Growth in India and China outweighed weakness in the Middle East.

Central bank gold reserves grew 148.4t in Q3, up 22% y-o-y. This is the highest level of net purchases since 2015, both quarterly and y-t-d, and notable due to a greater number of buyers.

Demand for gold in technological applications rose in Q3 by 1% y-o-y, to 85.3t. This marks the eighth consecutive quarter of growth, primarily driven by gold’s use in electronics such as smartphones, servers and automotive vehicles.

ETFs shed 103.2t in Q3. ETFs saw a 116t decline when compared with inflows of 13.2t  in Q3 ’17, experiencing the first quarter of outflows since Q4 2016. North America accounted for 73% of outflows, fuelled by risk-on sentiment, the strong dollar and price-driven momentum.

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