01 Nov 2022 21:09 PM
Gold jewellery consumption continued to rebound in the third quarter, and has now returned to the pre-epidemic level of 523 tons, a 10% increase from the third quarter of 2021.
[Zhitong Finance]On November 1, the latest “Global Gold Demand Trend Report” released by the World Gold Council showed that global gold demand (excluding OTC transactions) in the third quarter of 2022 increased by 28% year-on-year to 1,181 tons. The strong performance in the third quarter also brought total gold demand so far this year back to pre-pandemic levels; among them, despite the significant contraction in investment demand, consumer demand and central bank gold purchases have strongly boosted the overall performance of gold.
Among them, the scale of gold investment in this quarter decreased by 47% year-on-year, which was mainly due to the fact that ETF investors reduced the scale of investment in response to the dual challenges of aggressive interest rate hikes and the strengthening of the US dollar, resulting in a substantial outflow of 227 tons of gold ETFs in this quarter; The over-the-counter demand and negative sentiment in the futures market have hindered the performance of gold prices, resulting in an 8% month-on-month decline in gold prices in the third quarter of 2022.
Despite the difficulties, gold is still favored by individual investors; in response to high inflation and geopolitical risks, individual investors are paying more and more attention to gold’s value-preserving properties. Investors buying gold bars and coins as a hedge against inflation also boosted total retail investment demand for gold by 36% year-on-year. This was mainly driven by large purchases in Turkey (up more than fivefold year-on-year) and Germany (up 25% year-on-year to 42t), but other major global markets also contributed significantly.
Gold jewellery consumption continued to rebound in the third quarter, and has now returned to the pre-epidemic level of 523 tons, a 10% increase from the third quarter of 2021. The strong growth was largely led by urban consumers in India, whose jewellery consumer demand rose 17% year-on-year to 146 tonnes. Much of the Middle East saw similarly impressive growth: Saudi Arabia’s third-quarter gold jewellery consumer demand rose 20% year-on-year, while the UAE saw a 30% increase over the same period. On the other hand, with the increasing popularity of Chinese consumers for gold jewelry and the relative stability of domestic gold prices in the third quarter, some of the pent-up consumer demand has been released, and China’s gold jewelry demand has also experienced a slight year-on-year growth of 5%.
While the consumer demand for gold has stabilized, the amount of gold purchased by the central bank has also increased significantly. It is estimated that the amount of gold purchased in the third quarter will approach a new record of 400 tons. According to the World Gold Council’s central bank survey report this year, 25% of the central banks surveyed said they would increase their gold reserves in the next 12 months, and the actual central bank gold purchase trend also reflects the gold purchase plans of central banks.
On the supply side, gold mine production (net of net hedging) increased by 2% compared to the third quarter of last year, and the gold mining industry recorded growth for six consecutive quarters. In contrast, consumers chose to hold gold firmly in the face of rising inflation and a volatile economic outlook, so the total amount of gold recovered in the third quarter fell by 6% year-on-year.