World Gold Demand Plunged to 8-Year Low in Q3 2017

SEATTLE (Scrap Monster): The ‘Gold Demand Trends Q3 2017’ Report published by the World Gold Council (WGC) states that world gold demand tumbled sharply during the third quarter of the current year. The quarterly gold demand declined sharply by 9% to total 915 tonnes in Q3 ’17. This is the lowest since Q3 2009, WGC noted.

The global gold jewellery demand witnessed a slowdown of 3%, mainly on account of 25% plunge in Indian gold jewellery demand. The tough restrictions on gold purchases coupled with tax burden resulted in huge drop in gold purchases by the rural population in the country. The Indian demand totaled 114.9 tonnes in Q3 ’17 as compared with 152.7 tonnes in Q3 last year. On the other hand, Chinese gold jewellery demand surged ahead to total 159.3 tonnes, reporting year-on-year growth of 13%, mainly aided by robust purchases during holidays and festival occasions. The demand across the rest of Asia remained weak. Malaysia and Japan reported decline in demand, whereas Vietnamese demand climbed 14% over the previous year.

Among other regions, Turkey reported increased jewellery consumption. The Middle East demand declined 4% during the quarter. The demand jump in Iran was offset by significant decline in demand in other major consuming countries including Egypt, Saudi Arabia and the UAE. The US demand skyrocketed to 26.9 tonnes, touching the highest Q3 demand since 2012. The European demand fell 5% to 4.6 tonnes. The UK demand dropped, while the demand in other markets remained steady.

The gold investment demand totaled 241.2 tonnes in Q3, falling sharply by 28% when compared with the previous year. Inflows to gold-ETFs grew by just 18.9 tonnes. The total bar and coin demand grew by 17% on the back of 57% growth in China. Turkish demand tripled during the quarter. Europe too witnessed 36% growth. However, the bar and coin demand in India fell by 23%.

The official gold reserves with world’s central banks recorded 25% growth. The primary buyers during the quarterly period were Russia, Turkey and Kazakhstan. The central banks across the world added 111 tonnes to their gold holdings.

The WGC Gold Demand Trends Report also states that gold mine production registered marginal decline of 1% over the previous year. The mine production by China and Burkino Faso fell, whereas Suriname reported strong growth in gold mine production. The supply of recycled gold too declined by 6% during Q3’17 to 315.4 tonnes.