WGC 3rd Quarter Demand Trends

Yesterday afternoon the World Gold Council released their quarterly demand trends update for Q3 2015.  As usual we provide the summary for you as follows:

India lead a price-led surge in gold jewellery demand to 631.9t 

Global demand for gold jewellery grew 6% year-on-year as lower prices during July and early August attracted consumers. Q3 2015 was the strongest third quarter for jewellery demand since 2008.

A jump in bar and coin demand drove 27% growth in the investment sector 

Investment demand was up to 295.7 tonnes of gold bars and coins. Demand for these products was 33% higher year-on-year. Outflows from ETFs in July were slightly offset by small inflows throughout August and September.

Central banks again bought in bulk, adding 175.0t to their gold reserves 

Gold demand among central banks and other official institutions almost matched the 179.5 tonne record from Q3 2014. This is now 19 quarters of consecutive net purchases as gold continues to be recognised for its diversification benefits.

The technology space remains a challenging environment for gold 

Gold used in technological applications diminished further in Q3. Substitution to lower-cost alternatives, and further economies in the volume of gold used in wireless chip production, saw demand in the sector weaken by 4% year-on-year to 84.3 tonnes.

Total supply increased marginally to 1,100.1 tonnes, despite a slight decline in mine production 

Mine production inched lower to 827.8 tonnes as a number of new projects neared steady state production levels. Recycling activity shrank, as falling price encouraged consumers to buy rather than sell. A modest 20 tonnes of producer hedging was therefore the reason behind overall growth in the sector.