Powered by what analysts indicated was the FOMO (fear of missing out) factor, the global demand for gold rose to 1,313 tonnes in the July-September 2024 quarter, the World Gold Council mentioned in a recent report. Last year, the demand in the corresponding quarter was 1,249.6 tonne, which indicated the rise in Q3 FY25 consumption was 5%, the highest in a third quarter, said WCG.
According to the data, investment demand in the safe-haven metal rose by more than double to stand at 364 tonne. This was fuelled by a rise in the demand for gold exchange-traded fund (ETF), where investors from the west seemed to repose a lot of trust. The demand for ETFs was evident from the fact that July-September 2024 marked the first quarter since 2022 when ETF demand rose, standing at 95 tonne. However, a dip was recorded in the gold coins and bars during the same quarter (which is also Q2 FY25) to the extent of 9%.
How high gold prices impacted demand in different sectors
While the dizzy prices of gold possibly led to subdued purchase by central banks of different countries, the central bank to record the biggest buy of the precious metal in this quarter was the National Bank of Poland. It bought 42 tonnes. The cumulative purchases of the central banks went down by as much as 49% and reached 186.2 tonne. Significantly, the total purchases by central banks in the world in the corresponding period in 2023 stood at 363.9 tonne. WCG said the high gold prices prompted some central banks to sell from their reserves and book handsome gains.
Gold price during the quarter dampened jewellery demand
Gold prices continued their northward march in Q2 FY25 and touched an average price level of $2,474 an ounce. This appreciation in prices dampened consumption of gold jewellery. It declined by as much as 12% on volume parameters but rose 13% on terms of value. Significantly, the rise in gold prices took place even after factoring in the rise in supply of the metal, which was recorded at 5%, with contributions both from the mines as well as the recycling industry.
