Physical gold demand was up 7% in Q3 from a year ago according to the latest report on the gold market by GFMS. In its just-published Q3 Gold Survey, the consultancy group reports that the increase was because of an increase in net official sector buying and a marked improvement in the level of retail gold buying.
“…the pace of central bank purchases accelerated in the third quarter, to an estimated 132 tonnes, up by 13% year-on-year and more than double the previous quarter”, GFMS noted. Buying by China, which after announcing a 604 t increase in gold holdings in June, reported the acquisition of a further 19 t and 16 t in July and August respectively, is apparently the main reason for the increase.
GFMS’s figures show that on the retail side, demand for gold bars and coins registered a 26% year-on-year increase in Q3, rising to an estimated 296 t. The consultancy believes that a major driver behind Q3 growth was a sharp price correction in July, which saw the gold price plunge to a near six-year low at the start of the quarter. “Among other factors contributing to strong demand was increased volatility in the financial and equity markets, following the crash of the Chinese stock market and mounting fears over the impact on major advanced economies of the economic slowdown in emerging markets”, it observes.
In contrast to the above, jewellery fabrication, the largest demand sector, saw tonnage fall by 1%, to 550 t.
GFMS expects the gold price to average US$1,159/oz for 2015.
Bar and coin sales push up gold demand by 7% in Q3 (GFMS)