Q3 demand steady; up 6.2t y-o-y
Gold demand was 964.3t in Q3, just 6.2t higher y-o-y. Robust central bank buying and a 13% rise in consumer demand offset large ETF outflows.
Bar and coin demand jumped 28% to 298.1t as retail investors took advantage of the lower gold price and sought protection against currency weakness and tumbling stock markets. Jewellery demand rose 6% in Q3 as lower prices caught consumers' attention. A growing number of central bank buyers saw demand in this sector rise 22% y-o-y to 148.4t, the highest level of quarterly net purchases since 2015. Technology registered its eighth consecutive quarter of y-o-y growth, up 1%. Sharp outflows in gold-backed ETFs offset growth across much of the gold market.
Strong central bank and consumer demand offset ETF outflows
Bar and coin investors took advantage of the price dip; demand rose 28% y-o-y. Stock market volatility and currency weakness also boosted demand in many emerging markets. China - the world's largest bar and coin market - saw demand rise 25% y-o-y. Iranian demand hit a five-and-a-half-year high.
Q3 jewellery demand saw price-led y-o-y growth of 6%. Lower gold prices during July and August encouraged bargain hunting amongst price-sensitive consumers. Growth in India and China outweighed weakness in the Middle East.
Central bank gold reserves grew 148.4t in Q3, up 22% y-o-y. This is the highest level of net purchases since 2015, both quarterly and y-t-d, and notable due to a greater number of buyers.
Demand for gold in technological applications rose in Q3 by 1% y-o-y, to 85.3t. This marks the eighth consecutive quarter of growth, primarily driven by gold's use in electronics such as smartphones, servers and automotive vehicles.
ETFs shed 103.2t in Q3. ETFs saw a 116t decline when compared with inflows of 13.2t in Q3 '17, experiencing the first quarter of outflows since Q4 2016. North America accounted for 73% of outflows, fuelled by risk-on sentiment, the strong dollar and price-driven momentum.