Global Gold Demand Hits Record High in Q3 Driven by Investment Surge

Global gold demand soared to a record 1,313 metric tons in the third quarter, marking a 3% rise year-on-year. This surge was primarily fueled by a significant increase in investment demand. Demand for gold bars and coins grew by 17%, notably led by buyers in India and China. Investment in physically backed gold exchange-traded funds (ETFs) saw an extraordinary jump of 134%.

This robust investment appetite is attributed to factors like ongoing geopolitical tensions, uncertainty surrounding US tariffs, and a recent 'fear-of-missing-out' (FOMO) buying trend, pushing spot gold prices up by 50% year-to-date to a record high. The World Gold Council remains optimistic about gold's outlook, citing potential further boosts from a weaker US dollar, expectations of lower interest rates, and the threat of stagflation.

Offsetting the investment boom, demand for gold jewellery fabrication, the largest segment of physical demand, decreased by 23% to 419.2 tons as high prices deterred consumers. Central banks, a major demand source, increased their gold purchases by 10% to 219.9 tons in the third quarter. On the supply side, both recycling and mine production contributed to record quarterly supply.

Impact This news has a significant positive impact on gold prices and companies involved in gold mining, trading, and related financial instruments. For investors, it highlights gold as a strong performing asset, especially during times of economic uncertainty and geopolitical risk. The continued strong demand suggests potential for further price appreciation, benefiting commodity-linked investments. Impact rating: 8/10.

Difficult Terms: Geopolitical tensions: Conflicts or serious disagreements between countries. Stagflation: An economic condition characterized by high inflation combined with slow economic growth and high unemployment. FOMO (Fear Of Missing Out): A feeling of anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media. Physically backed gold exchange-traded funds (ETFs): Investment funds that hold physical gold and are traded on stock exchanges, allowing investors to gain exposure to gold prices without direct ownership. Jewellery fabrication: The process of manufacturing gold into jewellery. Central banks: Institutions that manage a nation's currency, money supply, and interest rates, often holding significant gold reserves.