Mumbai, Oct 30 (PTI) The global gold demand grew 5 per cent during July- September 2024 to 1,313 tonne, the highest in a third quarter, supported by strong investment in a record-high price environment, the World Gold Council said in a report on Wednesday.
The demand during the year-ago period was 1,249.6 tonne, according to WGC's Q3 2024 Gold Demand Trends report.
Global investment demand more than doubled year-on-year to 364 tonne, driven by a shift in demand for gold ETFs (exchange-traded fund) primarily from western investors.
Globally, gold ETFs added 95 tonne, marking the first positive quarter since the first quarter of 2022.
Bar and coin demand fell 9 per cent, but the year-to-date total remains strong at 859 tonne compared to the 10-year average of 774 tonne, said the report.
Central bank buying declined 49 per cent in the third quarter to 186.2 tonne compared to 363.9 tonne in the same period of 2023, with The National Bank of Poland becoming the largest buyer, adding 42 tonne to the country's gold reserves.
According to the report, the sharp increase in the gold price since March inhibited some central banks from buying, as well as encouraged some from selling among banks that manage their gold reserves tactically.
Gold continued to rise to record highs during the quarter reaching an average of USD 2,474 an ounce, hampering global demand for gold jewellery.
Total jewellery consumption was down 12 per cent year-on-year on a volume basis, but up 13 per cent in value terms suggesting that consumers are comfortable spending more on lower quantities of gold products.
The report said that the total gold supply increased 5 per cent year-on-year, with a jump of 6 per cent in mine production and an 11 per cent rise in recycling.
"The third quarter (July-September) saw increased investment and over-the-counter activity prop up global gold demand and drive price performance. While the higher gold price dampened demand in the majority of consumer markets, the import duty cut in India kept jewellery and bar and coin demand remarkably high in a record-breaking price environment," WGC Senior Markets Analyst Louise Street said quoting the report.
A 'Fear of missing out factor' amongst investors has been a key driver of increased demand this quarter, she said.
Investors have shown an appetite to buy into the price momentum, are encouraged by the prospect of future interest rate decreases, and are also considering gold's role as a safe haven in the face of US political uncertainty and escalating conflicts in the Middle East, Street added.
"Looking ahead, the step-change in gold investment flows is a trend that is likely to continue, which could keep both demand and price levels elevated. On the other hand, we've seen over 30 record price highs in 2024, and that environment will continue to be challenging for consumers. However, the prospect of economic growth is another factor we will be watching that could tip the scales," she said.