Gold shines in Q3 on price drop, says World Gold Council


Consumers across the world bought more gold in the third quarter of 2015, with the demand hitting the highest in more than two years, as prices dropped, the World Gold Council said.

It said overall demand was 1,121 tonnes in the above period – up 8 percent year-on-year – but increased outflows from gold-backed exchange-traded funds impacted the increase.

In the United States, bar and coin buying more than tripled to a five-year high of 32.7 percent. It also rose 70 percent in China and 35 percent in Europe due to a fall in gold prices.

Demand in India rose by 13 percent to 268.1 tonnes against a 238.2 tonnes incrase in the same period last year. In value terms, demand increased to 62,939 crore against 59,480 crore in the third quarter last year. Softer prices triggered incrased buying ahead of India’s wedding and festival season.

“Although, jewellery demand continues to dominate, at 211 tonnes jewellery volume for the quarter almost equalled the previous peak of 213 tonnes in Q3 2008, growth was broad based with both jewellery and investment demand up 15 percent and 6 percent, respectively, signifying the continuing reliance on gold in household portfolios and trust in its long-term prospects,” WGC Managing Director India Somasundaram PR said.

Elsewhere, the yuan devluation prompted higher buying in China while the European demand was boosted by concerns over Greece’s financial mess and geopolitical tensions in the easpern part of the continent.

Gold jewellery took the prime slot, with consumption rising 15 percent in India and 4 percent in China.

The report said that buying had fallen in some smaller markets such as Russia (down 29 percent) and Turkey (down 19 percent). It added that the demand could have been higher if outflows from the ETFs did not increase and central bank buying did not drop by 4.5 tonnes as it did.

For the full year, the WGC is maintaining its forecast for global gold demand of 4,200-4,300 tonnes, close to last year’s four-year low of 4,217 tonnes. While the Chinese demand is still expected to total 900-1,000 tonnes, the Indian demand has been lowered from a similar level to 850-950 tonnes due to poor a monsoon that is impacting rural agriculture incomes.

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