Global gold demand climbs 3% to quarterly record as investment soars: WGC

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Global gold demand rose by 3 per cent year-on-year to 1,313 metric tonnes, the highest quarterly number on record, in the third quarter as investment demand soared, the World Gold Council said on Thursday.

Spot gold prices are up 50 per cent so far this year after hitting a record high of $4,381 a troy ounce on October 20 on safe-haven demand driven by geopolitical tensions, US tariff uncertainty and more recently a wave of fear-of-missing-out or "FOMO" buying.

"The outlook for gold remains optimistic, as continued US dollar weakness, lower interest rate expectations, and the threat of stagflation could further propel investment demand," said Louise Street, senior markets analyst at the World Gold Council.

"Our research indicates the market is not yet saturated."

Demand for gold bars and coins rose 17 per cent in the third quarter, led by India and China, while inflows into physically backed gold exchange-traded funds jumped by 134 per cent, said the WGC, an industry body whose members are global gold miners.

Together these categories offset a continuing sharp fall in gold jewellery fabrication, the largest category of physical demand, which fell 23 per cent to 419.2 tonnes as high prices affected purchases by buyers all other the world.

Central banks, another major source of gold demand, increased purchases by 10 per cent to 219.9 tonnes in the third quarter, the WGC estimated, based on reported purchases and its assessment of unreported buying.

Central banks have bought 634 tonnes in January-September, "trailing behind the exceptional highs of the last three years, but comfortably above pre-2022 levels," the WGC said.

On the supply front, recycling added 6 per cent and mine production increased by 2 per cent in the third quarter, bringing the quarterly gold supply to a record high.