Global gold demand down 1 pc in Q3 at 1 360 tonne amid uncertainty over price WGC

Mumbai, Nov 3 (PTI) Global gold demand dipped 1 per cent year-on-year during September quarter to 1,369 tonne amid uncertainty over the metal's price, the World Gold Council (WGC) said in a report on Tuesday.

     During the third quarter this year, the gold price averaged USD 4,262 a troy ounce (oz) and the value of demand rose 22 per cent year-on-year to USD 188 billion, the 'Q3 2026 Gold Demand Trends' report said.

     High prices continued to dampen jewellery demand, which fell 17 per cent year-on-year to 313 tonne, the weakest third quarter. This was even below the pandemic-affected Q3 of 2020 when the demand was 331 tonne.

     Consumers continued the trend of switching to lighter and lower-carat pieces as the value of global jewellery demand edged higher to USD 43 billion.

     "From a regional perspective, in China jewellery demand was about 22 per cent down, while in India it was about 19.5 per cent. The demand was also affected in most countries including the US, Middle East, Saudi Arabia as well," WGC Regional CEO, India, Sachin Jain told PTI.

     Demand, however, recovered 12 per cent quarter-on-quarter, led by seasonal recoveries in China and India and some support from lower prices.

     Meanwhile, physically backed gold ETFs (exchange-traded funds) rebounded to inflows in the third quarter, adding 211 tonne, marking a significant reversal from the outflows recorded in the second quarter.

     European-listed funds led the growth, adding 92 tonne, the strongest quarterly increase since the first quarter of 2022 as investors across the region rebuilt positions following June's sell-off.

     "Historically, whenever the price of gold went down, which is what we saw in the previous quarter, the ETF normally showed an outflow. But interestingly, this quarter showed us very significant inflows, making that very strong," Jain said.

     Bar-and-coin demand dropped 19 per cent year-on-year to 268 tonne, falling back as individual investors stayed on the sidelines due to a lack of clear direction on the gold price.

     However, China was one of the few markets to grow where bar and coin demand rose 7 per cent y-o-y to 79 tonne, although it was 26 per cent below an exceptional second quarter.

     Central banks and other official institutions added a net 321 tonne to reserves during the July-September period, up 42 per cent year-on-year and the highest quarterly total since the fourth quarter of 2024, with portfolio diversification and risk management remaining the primary demand drivers.

     This trend was driven by China, Poland and the Czech Republic, which continued to build their gold reserves as part of multi-year accumulation strategies despite historically high gold prices.

     Technology demand rose 3 per cent year-on-year to 85 tonne, the highest quarterly total since fourth quarter of 2021.

     Electronics demand grew 5 per cent to 72 tonne, supported by AI-related manufacturing.

     Total gold supply declined 1 per cent year-on-year to 1,369 tonne, as an increase in mine production of 3 per cent to a third-quarter record of 1,071 tonne was offset by an 8 per cent drop in recycling to 314 tonne, despite elevated gold prices, marking its lowest level since the fourth quarter of 2023.

     "The third quarter was a mixed bag for gold demand. Gold ETF inflows came roaring back, with geopolitical risk and concerns around fiscal discipline driving institutional interest, in contrast to retail investors who held back amid uncertainty over the gold price outlook. Central banks remained an important pillar of demand as pronounced buying continued from the official sector. The outlook for gold looks finely balanced through to the end of the year," WGC Senior Markets Analyst Louise Street said.

     While rising interest rates and mixed inflation expectations present potential headwinds, the combined shadows of geopolitical risk and financial market stress may cause participants to seek stability in gold, she added.

(This story has not been edited by THE WEEK and is auto-generated from PTI)