The disappointing investment demand continues to dominate the gold market after the World Gold Council (WGC ) reported a 7% decline in precious metal demand in the third quarter. Accompanied by analisdollarserin evaluation of the important topics of the WGC report Cryptocoin. com we have prepared for its readers.
“The performance of gold is consistent with the macro environment”
In its latest Quarterly Demand Trends report released on Tuesday, WGC announced that total gold demand between July and September fell to 831 tonnes. Analisdollarser makes the following assessments in the report:
This decline was driven almost exclusively by ETFs, which overshadowed strength in other demand sectors during the quarter. It has swung from massive inflows in the third quarter of 2020 to modest exits this year. Jewellery, technology, bullion and coins were significantly higher than in 2020.
While the sluggish investment demand caused the summer average of gold prices to fall by $ 1,789.50, about 1% compared to the second quarter and 6% compared to the third quarter of 2020, the analisdollarserin approach is as follows:
Gold’s performance is consistent with the macro environment of supply and demand dynamics, higher interest rates and risk-averse investor appetite. A bright start, a flat middle and a weak end characterize a lackluster quarter for gold in the third quarter.
“Gold jewelery demand driven by k recovery and improved consumer sentiment”
While investment demand is scant at best through 2021, WGC says the overall market is resilient. WGC also notes that physical demand continues to recover from the effects of the COVID-19 pandemic. Looking at the jewelery industry, low prices have helped boost consumer demand, albeit below pre-pandemic levels. WGC states that in the third quarter, jewelry demand increased by 33% compared to 2020, reaching 442.6 tons. However, analisdollarser reminds us that demand is 12% below the five-year average:
In the third quarter, gold jewelry demand was driven by the recovery and improving consumer sentiment, and this trend continued from the first half of the year. Year-to-date global jewelery demand is almost 50% higher than in the same period in 2020.
Looking at the investment sector, WGC says that total demand fell to 235 tons, down more than 50% compared to the third quarter of 2020. According to the report, the decline is due to 27 tons of gold escaping the ETF market. Looking beyond the headline numbers, however, WGC notes that demand for physical bullion increased between July and September. In the report, it is stated that the demand for gold bullion and coins is 261.70 tons, an increase of 18% compared to last year. Analisdollarser comments:
Strong third-quarter growth was supported by a number of factors, including continued COVID lockdowns in many countries, continued fears of rising inflation, and August’s price drop that prompted many investors to buy.
Analisdollarser states that increasing chip prices may also affect the gold demand of the tech sector.
The WGC also notes that central bank gold demand remains a pillar of strength. The report states that central bank gold purchases totaled 69 tons in the third quarter. Analisdollarser says that with a net purchase of 393 tons from year to date, the annual total of 2020 (255 tons) was easily exceeded and it is ready to reach a significant total in 2021. WGC also reports solid growth in the tech sector as industrial demand for gold rose 9% in the third quarter to 83.3 tonnes. The description of Analisdollarserin is as follows:
As much of the world emerges from the COVID-19 pandemic, rising consumer confidence has created strong demand for big-ticket items like gadgets and high-end consumer electronics devices.
Despite growth in industrial demand, WGC notes some headwinds for this sector as workers return to the office and demand for personal computers and equipment falls. Analisdollarser states that increasing chip prices may also affect the gold demand of the tech sector. On the supply side of the gold market, WGC notes that in the third quarter, total supply decreased by 3% year-on-year to 1,238.9 tons, as recycling decreased in the gold market. On the other hand, WGC says mineral supply increased by 4% in the third quarter to approximately 960 tons. Analisdollarser shares the following information:
Recycled gold supply fell 22% year-on-year and was 16% lower than in the third quarter of 2019 due to the low gold price and depleted market supply.