On October 30th, Caixin reported (Editor Huang Junzhi) that the World Gold Council released the 2024 third-quarter 'Global Gold Demand Trends Report' on Wednesday, stating that due to the continuous historical highs in gold prices in the third quarter of this year, the total gold demand, calculated in US dollars, exceeded $100 billion for the first time, a 35% year-on-year growth, setting a new historical record.

The institution's data also shows that from July to September, the total global gold demand, including Over-the-Counter (OTC) investments, was 1,313 tons, a 5% year-on-year increase. It is reportedly the highest record for the third quarter in years.

Of note, a significant inflow of global Gold ETFs was a major factor driving the growth in gold demand in the third quarter. Gold ETFs are funds traded on stock exchanges that track the price of gold, reflecting the level of activity in global gold trading and the demand for physical gold investment to some extent.

Juan Carlos Artigas, Director of Investment Research at the World Gold Council, mentioned in an interview that the third-quarter demand received support from investors, especially those from Western markets, who reacted to low interest rates and ongoing geopolitical risks.

Investment demand surged.

According to the data from the World Gold Council, in terms of demand, global investment demand for gold has more than doubled, with an increase of 132% in the third quarter compared to the same period last year, reaching 364.1 tons.

"This is the strongest quarter since the first quarter of 2022, when the Russia-Ukraine conflict broke out, leading to a large influx of safe-haven funds into gold ETFs," the report said.

The World Gold Council's report states that continuing geopolitical turmoil has prompted Western ETF investors to "finally take the lead." A large influx of funds into global gold ETFs, as well as strong otc trade investment, "continues to exist," are key factors driving total gold demand this quarter.

The report also states that after experiencing nine consecutive quarters of outflows, global physical gold ETFs saw an inflow of 94.6 tons in the third quarter. However, investment demand for bars and coins decreased by a small 9% year-on-year to 269.4 tons.

The World Gold Council stated that investment demand in India increased by 41% year-on-year to 76.7 tons this quarter. Artigas said that India's overall demand for gold has made a contribution, benefiting from lower gold imports and long-term capital gains tax.

Central bank purchases slow down.

On the other hand, the World Gold Council stated that central banks' purchases of gold will still be a "strong" year, with purchases amounting to 694 tons from the beginning of the year to date, but lower than the record in 2023.

The report stated that central bank gold demand in the third quarter slowed to 186.2 tons, a 49% year-on-year decrease. The central banks of Poland and Hungary were the largest buyers of gold this quarter.

Artigas stated that the central bank's demand remains strong, with the net purchase volume from the beginning of the year matching the performance of the same period in 2022. However, "although we expect official institutional demand to be significantly higher than average this year, it is likely to be lower than last year's total."

He said that the World Gold Council has not yet seen, nor does it expect, large-scale selling, but "some central banks may tactically delay purchasing gold during periods of rapid gold price increases."

USA Presidential Election and Gold

When asked how the US presidential election might affect gold prices and demand, Artigas stated that historically, during Democratic presidential terms, demand for US gold bars and coins tends to be higher; however, "given its global nature, this has not translated into gold performing better or worse during any specific political party's term."

He mentioned that the US presidential election "traditionally does not have a direct impact on the gold price; instead, gold performance is influenced over time by factors such as the monetary, fiscal, and global trade policies implemented by a government during its term."

"During the presidencies of Republican Trump and the current Democratic Biden administration, the gold price has risen."

"This time, considering the polarized environment, political uncertainty may play a bigger role. It seems that regardless of who wins the US presidential election, some domestic and foreign policies proposed by both candidates may favor gold in the long term," he added.

Editor/ping