The World Gold Council (WGC) released a report on Thursday, October 30th, stating that global gold demand in the third quarter of this year increased by 3% to reach 1,313 tonnes, marking a record high for the quarter and seeing a significant surge in investment demand.
According to the press release titled “Gold Breaks Records as Investors Seek Shelter From Market Turbulence,” the gold price trend report for the third quarter indicates that the spot gold price has risen by approximately 50% so far this year, reaching a historic high of $4,381 per ounce on October 20th. The strong demand for safe-haven assets is being driven by geopolitical tensions, uncertainty surrounding U.S. tariffs, and a recent wave of “fear of missing out” (FOMO) buying pressure.
Louise Street, a senior market analyst at the World Gold Council, stated in the report, “The outlook for gold remains positive. The continued weakening of the U.S. dollar, expectations of lower interest rates, and the possibility of stagflation could further drive investment demand. Gold prices have consistently hit new highs this year, and the current environment indicates potential for further increases. Our research shows that the market is not yet saturated.”
The report highlighted a 17% increase in demand for gold bars and coins in the third quarter, with growth recorded in almost all markets, particularly in India and China. Inflows into physically-backed exchange-traded funds (ETFs) surged by 134%. The growth in investment demand offset the significant decline in demand for gold jewelry. Global gold jewelry manufacturing volume decreased by 23% to 419.2 tonnes, marking the most significant decline in physical demand among consumer goods due to the soaring gold prices.
The World Gold Council estimated that central banks are another major source of gold demand, with purchases by central banks increasing by 10% year-on-year in the third quarter and by 28% for the quarter, reaching 219.9 tonnes. In the first nine months of this year, central banks purchased a total of 634 tonnes of gold, which, as the report pointed out, “although lower than the record highs of the past three years, is still significantly higher than levels prior to 2022.”
On the supply side, gold recycling increased by 6% in the third quarter, while mine production also grew by 2%, resulting in a new high for quarterly gold supply.