Gold demand softens in Q3

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Figures from the World Gold Council suggest demand for gold globally fell by 2% year-on-year in the third quarter of 2014.

Demand fell in areas such as technology, where substitutes took greater market share, although net investment demand rose 6% over the period, and central banks continued to add gold to their holdings. Demand for bars and coins was particularly weak, however, with an estimated 21% fall as measured by year-on-year figures.

Supply dropped 7% over the period.

Key factors influencing demand for gold in the latest quarter included the dollar price as well as the traditional surge in jewellery sales in India during Diwali. This year’s Diwali saw the biggest proportional surge in gold sales in India since 2008, the Council noted.

Jewellery sales also continue to strengthen in the US market. The Council suggests that sales are being boosted by the ongoing economic recovery in that country, coupled with lower dollar prices for gold.

In contrast, third quarter sales in Turkey were the weakest ever recorded, against a backdrop of economic and political uncertainty, while demand across the Middle East was down some 14% year-on-year.

Looking at the changes in ETF demand since this time last year, the Council concludes that “tactical investors have largely exited and the remaining base of ETF positions are held as strategic investments.”






Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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