While the emerging market’s appetite for gold increased in the third quarter, it wasn’t enough to offset the exodus from physically backed gold exchange traded funds and slowing central bank demand.
Total gold demand in Q3 2013 was 869 tons, down 21% in the same quarter year-over-year, according to the World Gold Council.
Comparing third quarter gold consumption between 2012 and 2013, demand from jewellery increased 5.4%, technology rose 0.7% and physical bullion added 4.4%.
Chinese jewellery demand hit 164 tons, up 29% in the third quarter year-over-year. Moreover, jewellery demand in the Middle East, Turkey and across South East Asia all picked up.
However, India gold demand contracted by 71 tons due to the government cracking down on gold imports to save the rupee currency. Moreover, central bank purchases declined 16.8% in the third quarter. Gold-backed ETFs also saw outflows of 119 tons of gold in the third quarter after shrinking by 402 tons in the second quarter this year. [Gold ETFs Brush Off Central Bank Policies]
In contrast, global bar and coin demand in the first three quarters of the year rose 36% compared to the same period last year.
“Consistent with the first two quarters of 2013, the global gold market remains resilient, underpinned by the continued shift in demand from West to East, strong demand in consumer categories and solid central bank and technology sectors,” Marcus Grubb, Managing Director, Investment at the World Gold Council, said in the press release.
Physically backed gold ETFs include:
- SPDR Gold Shares (NYSEArca: GLD)
- iShares Gold Trust (NYSEArca: IAU)
- ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)
- ETFS Physical Asian Gold Shares (NYSEArca: AGOL)
For more information on gold, visit our gold category.
Max Chen contributed to this article. Tom Lydon’s clients own shares of GLD.