Global gold demand declined by six per cent to 1,147.5 tonne during the third quarter of 2023 on sluggish demand for bars and coins and from central banks, World Gold Council (WGC)’s latest report said on October 31.
Gold demand in China, the world’s largest gold-consuming nation, rose marginally to 247 tonne in Q3 this year from 242.7 tonne in the year-ago period.
Whereas gold demand in India, the world’s second-largest gold-consuming nation, rose 10% to 210.2 tonne against 191.7 tonne a year ago.
In the case of neighbouring countries, Pakistan’s gold demand fell 11% to 11.6 tonne during the third quarter of 2023 from 13 tonne in the year-ago period, while Sri Lanka’s gold demand rose substantially to 2.4 tonne from 0.3 tonne.
According to the report, the world jewellery demand declined by one per cent to 578.2 tonne in the third quarter of this year from 582.6 tonne in the year-ago period.
“The environment of high gold prices and economic uncertainty was a key driver of the year-on-year decline, particularly in some of the more price-sensitive markets in Asia and the Middle East,” the report said.
“China saw a disappointing third quarter as consumers were reluctant to buy in the face of the very high local price premium, raising expectations of a price correction,” it said.
“Jewellery demand has continued to hold up relatively well in spite of the very high price environment this year. But risks to this sector remain, given the precarious economic scenario in many markets and continued pressure on consumers from the cost of living crisis,” it added.
As per the report, global bar and coin demand fell 14% to 296.2 tonne during the third quarter from 344.2 tonne a year ago.
“The year-on-year decline in bar and coin investment in the third quarter was due to certain pockets of lower demand, notably in Europe (Germany in particular), the U.S., Turkey, Australia and Iran,” it said.
“Investment demand for gold ETFs, bars and coins was anaemic in Q3. At 157 tonne, investment was only half of its five-year quarterly average of 315 tonne,” the report noted.
Gold demand for usage in technology fell three per cent to 75.3 tonne from 77.3 tonne because demand in the electronics industry remained relatively weak, although some sectors showed signs of recovery.
According to the report, central banks’ gold buying also declined 27% to 337.1 tonne in the third quarter from 458.8 tonne in the year-ago period.
“Added to the record-breaking H1 total, year-to-date, the net purchases now stand at 800 tonne. Looking ahead, central bank demand is on course for another strong annual total,” it said.
“The total gold supply increased six per cent to 1,267.1 tonne during the third quarter from 1,190.6 tonne a year ago. Mine production hit a record 971 tonne in Q3; recycled gold rose year-on-year to 289 tonne in the said period,” the report added.