Gold demand in Q3 drops 2%: WGC

According to the World Gold Council’s Gold Demand Trends for the three months ending September 30, 2014, gold demand amounted to 929tonnes falling 2 percent lower compared to the same quarter last year, which the WGC describes is a subdued performance of the quarter.

In the jewellery segment, demand softened by 4 percent (on y-o-y basis) to 534.2 tonnes, (from 556.3 tonnes in the corresponding quarter of last year), but the comparison continues to be heavily influenced by the events in 2013. Longer term analysis shows a jewellery market in good health. Year-to-date volumes continue to extend the broad uptrend from the low seen in 2009.

Market-wise, India witnessed a healthy growth of gold jewellery, rising 60 percent to 183 tonnes, driven by the onset of Diwali and festive season and stronger consumer confidence. This was the second highest Q3 on record. In China, the demand fell 39 percent over the same quarter in 2013, to 147 tonnes.

The US saw stronger consumer confidence in buying with consumers making discretionary spends and resulting in a 4 percent (on y-o-y basis) increase in gold jewellery demand, to the highest Q3 since 2009.

Investment demand for bars, coins and ETF’s rose by 6 percent (on y-o-y basis) to 204 tonnes. Outflows from ETF’s were at 41 tonnes from 120 tonnes in the same quarter last year. Global demand for bars and coins fell by 21 percent to 246 tonnes, seeing investors remained low on the purchases as gold demand stabilised following a surge in demand last year.

Investment demand posted a 6% increase, reaching 204t, although a stable price caused investors to hold back. Central Banks added a further 92.8t to their coffers. Supply was down 7 percent in Q3, with the volume of recycled gold continuing to shrink.

According to Marcus Grubb, Managing Director Investment Strategy notes that gold demand in the quarter is “well within the normal longer term trends and the key drivers of gold demand remain in place.”