Reports
Global Gold Demand Fell In Q3, China Appetite Fades Slightly, Underlying Market Strong
Global demand in the three months to the end of September fell by 11 per cent to 1,084.6 tonnes from the year-ago record level of 1,223.5 tonnes, hit by a drop in demand from China, although longer term trends remain positive, the World Gold Council said.
Economic and geopolitical uncertainties continue to underpin the underlying level of gold demand, the industry group said. Demand in the third quarter was above the five year quarterly average of 984.7 tonnes.
In value terms, gold demand fell 14. per cent year-on-year at $57.6 billion and the average gold price of $1,652/ounce was down 3 per cent on the record average Q3 2011 price, the World Gold Council said.
In China, demand fell by 8 per cent to 176.8 tonnes in the quarter from 191.2 tonnes a year before due to falls in jewellery of 6 per cent and investment of 12 per cent mainly as a result of negative sentiment surrounding China's slowing economy, the WGC said.
Global investment in exchange traded funds over the quarter rose by 56 per cent on the previous year.
The Indian market – a key one in terms of demand given the importance of jewellery - showed some recovery, up 9 per cent to 223.1t from 204.8t in Q3 2011 following increases in both jewellery and investment demand. In comparison with Q3 2011 jewellery demand was up 7 per cent to 136.1t and investment demand rose by 12 per cent to 87.0 tonnes.
Central banks bought 97.6 tonnes in the quarter. In six out of the last seven quarters, central bank demand has been around 100 tonnes, which is a sharp increase from as recently as 2010. The year to date figure for central bank buying is up 9 per cent, the figures showed.
“Gold is beginning to re-establish itself as part of the fabric of the financial system. In the medium term, the quantitative easing initiatives in the West and the continuing growth story in the East, particularly in India and China, coupled with the seasonally strong quarter coming up in Asia, are excellent indicators for further growth in the gold market,” Marcus Grubb, managing director, investment, at the WGC, said.
