Driven by strong investment interest and record prices, total gold demand rose 5% year-on-year, reaching 1,313 tonnes in the third quarter—the highest ever recorded for Q3.
Investment Demand Surges as Gold ETFs Rebound
A significant contributor to this growth was global investment demand, which more than doubled to 364 tonnes. The rise was propelled by Western investors, particularly those investing in gold exchange-traded funds (ETFs). Gold ETFs added 95 tonnes to holdings in Q3, marking their first positive quarter since early 2022. Despite a 9% decline in bar and coin purchases, year-to-date demand for these physical gold products remains robust at 859 tonnes, exceeding the 10-year average of 774 tonnes.
Central Bank Buying Slows but Remains Steady
Central banks also maintained their appetite for gold, with purchases totalling 186 tonnes in Q3. Though slightly lower than previous quarters, year-to-date demand from central banks reached 694 tonnes, in line with the same period in 2022, underscoring their continued reliance on gold as a secure reserve asset.
Jewellery Demand Dips Amid Record Gold Prices
Gold prices averaged an unprecedented $2,474 per ounce during the quarter, affecting consumer purchases of gold jewellery, particularly in Western markets. Jewellery demand fell 12% by volume, though its value rose 13%, indicating that consumers are willing to invest in smaller quantities of high-value gold products.
In contrast, India’s gold demand remained resilient. According to Louise Street, Senior Markets Analyst at the World Gold Council, "While the higher gold price dampened demand in many consumer markets, the import duty cut in India kept jewellery and bar and coin demand remarkably high in a record-breaking price environment."
Technology Sector Fuels Demand as AI Drives Electronics Growth
Gold demand from the technology sector rose 7% year-on-year, largely due to the electronics industry’s reliance on gold in high-performance applications, particularly as artificial intelligence continues to advance.
Supply Chain Sees a Boost
Total gold supply increased 5% year-on-year, spurred by a 6% rise in mine production and an 11% increase in recycling. This rise in supply helped meet the growing global appetite for the precious metal across various sectors.
Future Outlook: Investor Interest Poised to Keep Gold Prices Elevated
Street noted the “fear of missing out” sentiment among investors as a key driver behind the increased demand. “Investors have shown an appetite to buy into the price momentum, encouraged by the potential for future interest rate decreases and gold’s appeal as a safe haven amid US political uncertainties and escalating conflicts in the Middle East,” she said.
Looking ahead, Street anticipates continued strength in investment demand, which may keep gold prices high. However, she cautions that consumer markets could face challenges if gold prices continue to break records. "The prospect of economic growth will be another factor we are watching that could tip the scales,” she added.
The full Gold Demand Trends Q3 2024 report, including data from Metals Focus, is available from the World Gold Council.