Global gold demand up in Q3

Oksana Patron

2 November 2022

The global gold demand (excluding OTC) increased 28% year-on-year in the third quarter of 2022, helped by consumers and central banks and despite a contraction in investment demand, according to the World Gold Council’s Gold Demand Trends report.

During that time, in Australia jewellery demand saw a 71% growth year-on-year once Covid restrictions were eased and grew from 1.4t in Q3 2021 to 2.3t Q3 2022. At the same time, Q3 2022 consumer demand for gold in Australia grew 17% compared to the same period a year ago, from 6.1t in Q3 2021 to 7.1t in Q3 2022.

On top of this, there was a 1% year-on-year increase in bar and coin demand to 4.8t in Q3 2022.

However, globally the investment was down 47% year-on-year as exchange traded fund (ETF) investors were put off by a combination of higher interest rates and a stronger US dollar with significant outflows of 277t.

Also, weakness in OTC demand and negative sentiment in future markets hampered gold’s price performance which, as a result, saw an 8% quarter-on-quarter drop.

The report confirmed that jewellery consumption continued to rebound and was back to pre-pandemic levels, 10% higher compared to Q3 2021, with similar growths observed in Middle East, where Saudi Arabian jewellery consumption was up 20% since Q3 2021, and United Arab Emirates went up 30% for the same period. Following this, Chinese jewellery demand also experienced a modest 5% increase year-on-year driven by improved consumer confidence, a dip in the local gold price in July and the release of some pent-up demand.

Central bank buying also picked up significantly with estimated record purchases of nearly 400t in the third quarter a pattern which reflected insights from central bank survey, in which 25% of respondents had said they intended to increase their gold reserves in the next 12 months.

“Looking ahead, we anticipate central bank buying and retail investment to remain strong and that could help offset potential declines in OTC and ETF investment that may prevail if the dollar strength persists,” Louise Street, senior markets analyst at the World Gold Council, said.

“We also expect to see jewellery demand continue to perform strongly in some regions such as India and Southeast Asia, while the technology sector will likely witness further decline in the face of economic deceleration.”