Demand for gold has grown by three per cent to 1107.9t during the third quarter of 2019, according to the World Gold Council’s latest Gold Demand Trends report.

The Report revealed a surge in exchange-traded fund (ETF) inflows outweighed softer demand elsewhere in the market. 

Jewellery demand, however, was hindered by the sustained strength in the gold price, which hit a new multi-year high, as well as global concern circulating the health of the global economy. 

Central bank demand fell 38 per cent in comparison to the record Q3 last year, which recorded the highest level of quarterly net purchases in data series. 

Jewellery demand was down 16 per cent in Q3, which according to the World Gold Council, can be attributed to weak consumer sentiment, due to continued geopolitical and economic uncertainty, coupled with substantially higher gold prices, dented jewellery purchases in all major markets. 

Bar and coin investment halved in Q3, to 150.3t.

“Higher gold prices, across many key currencies, were the main cause of the decline to what is a multi-year quarterly low, as retail investors across the globe opted to defer purchases and lock-in profits,” the Gold Demand Trends Report stated. 

The gold price rally continued to reach new multi-year highs, with the gold price increasing five per cent during Q3. 

“The driving factors behind this price momentum continued to be ongoing geopolitical tensions, a slowdown in economic growth, and lower interest rates from central banks across the globe,” the Report stated. 

“Demand this quarter nudged higher as the continued surge into ETFs more than compensated for weaker demand elsewhere. Investors have increased their exposure to gold in response to low interest rates, negative yields, and geopolitical and economic uncertainty,” World Gold Council Head of Market Intelligence Alistair Hewitt said.

“Indeed, gold-backed ETF volumes hit an all-time high in September. But those same global trends, notably an economic slowdown in India and China coupled with the sharp increase in the gold price, mean many consumers have held off buying gold jewellery.

“Looking forward, we expect to see many of these trends continue into the end of the year as monetary policy is likely to become even more accommodative in the US and global political issues continue to weigh on sentiment.”