Surge in ETF inflows supports Q3 global gold demand growth: WGC

Global gold demand grew modestly to 1,107.9 tonnes in the third quarter of 2019, a rise of 3% on the same period last year, according to the World Gold Council’s latest Gold Demand Trends report. A surge in exchange-traded fund (ETF) inflows outweighed softer demand elsewhere in the market.

Although central bank demand remained healthy, it was significantly lower than the record levels of purchases in Q3 2018. Jewellery demand, however, was hampered by the continued strength in the gold price, which hit a new multi-year high, as well as consumers being downbeat on the health of the global economy. 

Holdings of gold-backed ETFs hit a new all-time high of 2,855.3 tonnes in the third quarter. Holdings grew by 258.2 tonnes during the quarter, the highest level of quarterly inflows since Q1 2016. Accommodative monetary policies, along with safe-haven and momentum buying, were the main factors driving inflows into the sector.

Central banks added 156.2 tonnes to reserves in Q3, falling 38% in comparison to the record Q3 last year. Central banks have purchased 547.5 tonnes on a net basis, 12% higher y-o-y.

Jewellery demand was down 16% in Q3 to 460.9 tonnes. Weak consumer sentiment, due to continued geopolitical and economic uncertainty, coupled with substantially higher gold prices, dented jewellery purchases in all major markets.

Bar and coin investment halved in Q3, to 150.3 tonnes. Higher gold prices, across many key currencies, were the main cause of the decline to what is a multi-year quarterly low, as retail investors across the globe opted to defer purchases and lock-in profits.

Gold supply rose 4% in Q3 to 1,222.3 tonnes. Growth was driven by a 10% increase in recycling, to its highest level since Q1 2016, as the ongoing price rally continued to encourage selling back by consumers. Mine production was virtually unchanged y-o-y at 877.8t.

The gold price rally continued to reach new multi-year highs. The gold price rose 5% during Q3, finding sustained support around US$1,500/oz. The driving factors behind this price momentum continued to be ongoing geopolitical tensions, a slowdown in economic growth, and lower interest rates from central banks across the globe.

Alistair Hewitt, Head of Market Intelligence at the World Gold Council, commented: “Demand this quarter nudged higher as the continued surge into ETFs more than compensated for weaker demand elsewhere. An economic slowdown in India and China coupled with the sharp increase in the gold price, mean many consumers have held off buying gold jewellery.”

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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