Global gold jewellery demand +6% to 536 tonnes in Q3: WGC
The World Gold Council’s latest Gold Demand Trends report has stated that inn Q3 2018 the global gold jewellery demand increased by 6 per cent to 536 tonnes, from 506 tonnes in the same period in 2017.
Accoding to WGC, this price-led y-o-y growth in jewellery demand worldwide is due to the lower gold prices during July and August thta encouraged bargain hunting among price-sensitive consumers. The report highlighted that growth in India and China was up 10 per cent in each region and tjere wasn an outweighed weakness in the Middle East, which was down 12 per cent.
Moreover, global gold demand was steady in Q3 2018 at 964 tonnes, up just 6 tonnes year-on-year (958 tonnes in Q3 2017). Robust central bank buying and a 13 per cent rise in consumer demand to 834 tonnes, from 739 tonnes in the same period last year, offset large outflows in gold-backed exchange-traded funds (ETFs).
Lower gold prices saw retail investors take refuge in bars and coins, while jewellery purchases increased in India, China and across South-East Asia. Bar and coin investors took advantage of the price dip, with demand up 28 per cent y-o-y.
Stock market volatility and currency weakness boosted demand in many emerging markets. China, the world’s largest bar and coin market, saw demand rise 25 per cent to 86 tonnes y-o-y. Iranian demand hit a five-and-a-half year high at 21 tonnes.
Central bank gold reserves grew 148 tonnes in Q3 2018, up 22 tonnes y-o-y (122 tonnes in Q3 2017). This is the highest level of net purchases since 2015, both quarterly and year-to-date. The quarter was particularly notable due to a greater number of buyers.
ETF outflows reached 103 tonnes in Q3 2018, the first quarter of outflows since Q4 s2016. North America accounted for 73 per cent of the outflows, fuelled by risk-on sentiment, a strong dollar and price-driven momentum.
As per the reprort, recycling decreased by 4 per cent to 306 tonnes, compared with 318 tonnes in Q3 2017.
Alistair Hewitt, Head of Market Intelligence at the World Gold Council, commented: “The physical market responded quickly when the gold price breached US$1,200/oz in August, with retail investors around the world diving into the market. And there are welcome developments in the central bank space. They’re buying a lot and we are seeing new central banks enter the market as they look to hedge their dollar exposure.”
“The equity sell-off last week is a timely reminder of the threats stalking markets: valuations are stretched, debt levels are high, and rising rates and quantitative tightening pose risks that an allocation to gold can help hedge,” he added.
According to WGC, the total supply of gold decreased slightly