LONDON (Reuters)-The World Gold Council (WGC) said on Thursday that global gold demand fell to its lowest level since the fourth quarter of 2020 in the third quarter due to the dumping of gold by financial investors.
However, WGC stated that there is strong demand for gold bars and coins from jewelers, central banks and small retail investors.
WGC stated in its latest quarterly report that the total demand for gold from July to September was 831 tons, which was higher than 894.4 tons in the same period last year and 1,084.9 tons in the third quarter of 2019.
These figures show the continuing impact of the coronavirus pandemic.
With the spread of the virus and the sudden drop in jewelry sales due to store closures and unemployment, central banks have suspended purchases, especially in Asia, but the threat of economic losses has triggered a large stock of investors, mainly in the West.
Gold is generally regarded as a safe store of value.
As the economy recovers, demand from the central bank and jewelry has partially recovered. Small investors are buying faster than before the pandemic, but large investors are fickle.
Last year, as economic growth rebounded, ETFs sold gold, and this year it was because people turned their attention to raising interest rates, which would reduce the attractiveness of unproductive gold.
WGC senior market analyst Louise Street said that for the full year, “strong consumer and central bank demand will reduce ETF losses.”
“Demand for jewellery will continue to exceed last year’s level, but overall investment demand in 2021 will decline, despite the healthy demand for gold, silver and coins,” she said. (Illustration: Gold Demand, https://fingfx.thomsonreuters.com/gfx/ce/znvnezgmxpl/WGC%20Q3.JPG)
WGC predicts that the demand for jewellers in 2021 will be between 1,700 and 1,800 tons, compared with 1,401 tons in 2020 and 2,123 tons in 2019.
He said that if the central bank purchased more than 450 tons this year, higher than the 255 tons in 2020, but lower than the 605 tons purchased in 2019, he would “not be surprised”.
Below are the figures and comparisons for the third quarter.
Gold request (T) *
Q3 Q2 Q3%%
2021 2021 2020 change
Q-on-Q Y-on-Y
Jewelry 442.6 396.6 332.9 12% 33%
Technology 83.8 80.2 77.2 4% 9%
-Of which electronics 68.9 66.4 63.2 4% 9%
-Other industries 12.0 10.9 10.9 10% 10%
-Dental 2.9 2.9 3.1 0% -8%
Investment 235.0 283.8 495.0 -17% -53%
-Ingots and coins 261.7 243.1 221.0 8% 18%
-ETF and similar -26.7 40.7 273.9
Central Bank 69.3 190.6 -10.6 -64%
Total demand 830.8 951.2 894.4 -13% -7%
* Source: World Gold Council, gold demand trends in the third quarter of 2021