Global demand for gold rises 5 percent annually in Q3


(MENAFN) Global demand for Gold experienced a notable increase of 5 percent on an annual basis in the third quarter of the year, reaching just over 1,300 tons and surpassing USD100 billion for the first time, according to a report released by the World gold Council on Wednesday. This quarter marked a record increase in demand, primarily driven by a significant surge in investment demand, which more than doubled to 364 tons. The rising interest in gold exchange-traded funds (ETFs) among predominantly Western investors contributed to this remarkable growth, reflecting a broader trend of shifting preferences towards gold as a secure investment amid ongoing uncertainties in the geopolitical landscape.

The report indicated that a "fear of missing out" phenomenon played a crucial role in boosting gold demand during this period, as investors increasingly sought the perceived safety of gold. This surge in interest came against a backdrop of mounting tensions in U.S. politics, particularly with the presidential elections approaching, as well as escalating geopolitical conflicts in the Middle East. Notably, gold ETFs accounted for 95 tons of the investment demand, marking the first increase since the first quarter of 2022, while demand for gold bars and coins saw a decline of 9 percent.

Despite a slowdown in central banks' gold purchases during the third quarter, demand remained robust at 186 tons, bringing the year-to-date total for central bank purchases to 694 tons. The World Gold Council also noted that gold prices reached record highs in the third quarter, averaging USD2,474 per Troy ounce. This increase in price negatively impacted global jewelry demand, which fell by 12 percent year-on-year, although the total value of jewelry consumption rose by 13 percent, indicating that consumers were willing to spend more for smaller quantities of gold products.

On the technology front, gold demand saw a 7 percent annual increase, fueled by advancements in artificial intelligence (AI), which require gold in various applications. Additionally, the total gold supply rose by 5 percent compared to the same quarter last year, driven by a 6 percent increase in mine production and an 11 percent rise in recycling activities, according to the World Gold Council. This combination of factors highlights the evolving dynamics of the gold market and the influences shaping both demand and supply in a changing economic environment.

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