The World Gold Council reported on Wednesday that total global gold demand rose by five percent year-on-year to 1,313 tonnes, marking a record high for the third quarter. According to the council's Q3 2024 Gold Demand Trends report, total demand surpassed $100 billion for the first time ever, driven by robust investment in a high-price environment. Global investment demand surged more than twofold year-on-year to 364 tonnes, primarily due to a significant shift in demand for gold ETFs, mainly from Western investors. Worldwide, gold ETFs saw an addition of 95 tonnes, the first positive quarter since Q1 2022. Demand for gold bars and coins declined by nine percent, but the year-to-date total remains strong at 853 tonnes, compared to the 10-year average of 774 tonnes.
Central bank purchases slowed in Q3, though demand remained strong at 186 tonnes. Year-to-date central bank demand reached 694 tonnes, consistent with the same period in 2022. Gold prices continued to climb to record highs during the quarter, averaging $2,474 per ounce, which negatively impacted global demand for gold jewelry. Total jewelry consumption fell by 12 percent year-on-year in volume but rose by 13 percent in value, indicating that consumers are willing to spend more on fewer gold products. Additionally, total demand for gold in technology increased by 7 percent year-on-year, supported by growth in the electronics sector, as the AI boom continues to drive demand for gold.
Total gold supply increased by 5 percent year-on-year, with a 3 percent rise in mine production and an 11 percent increase in recycling. Louise Street, Senior Markets Analyst at the World Gold Council, noted: “Q3 witnessed increased investment and over-the-counter activity that bolstered global gold demand and drove price performance. Although the higher gold price dampened demand in most consumer markets, the import duty cut in India sustained high jewelry and bar and coin demand in a record-breaking price environment. A ‘FOMO factor’ among investors has been a key driver of increased demand this quarter. Investors are keen to capitalize on price momentum, encouraged by the prospect of future interest rate decreases, and are also considering gold’s role as a safe haven amid US political uncertainty and escalating conflicts in the Middle East.”
Looking ahead, the surge in gold investment flows is likely to continue, potentially maintaining high demand and price levels. However, with over 30 record price highs in 2024, the environment remains challenging for consumers. The prospect of economic growth is another factor to watch, which could influence the market dynamics.
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