Investors Continue Chasing Gold; Investment Demand Surges 27% in Q3 2015

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, November 13, 2015, 11:12 [IST]

Global investment demand saw a significant increase in the third quarter of 2015 and was up 27 per cent to 230 tonnes, the World Gold Council (WGC) has stated. Bar and coin purchases were up by a third on Q3 2014 with Western markets in particular showing a surge.

"In the US, bar and coin demand reached its highest total in five years, up 207 per cent to 33 tonnes. Europe also saw strong levels of demand in the investment sector as ongoing concerns surrounding the Greek debt crisis and uncertainty in Eastern Europe, the result of a number of factors including continuing tensions between Russia and Ukraine and saw demand climb by 35% to 61tonnes," the WGC said in a report.

In China, investment demand grew by 70 per cent to 52 tonnes, as demand was initially stimulated by the gold price weakness in July, which was further fuelled by the mid-August foreign exchange reform. In India, the investment sector saw its first increase since Q3 2014, up 6 per cent year-on-year to 57 tonnes.

Jewellery demand was also healthy during the quarter. Overall jewellery demand for Q3 2015 was 632 tonnes compared to 594 tonnes in Q3 2014, up 6 per cent year-on-year. Consumers in India, China, the US and the Middle East took advantage of lower prices in July and August. This was particularly evident in India, partly as festival purchases were brought forward, resulting in a 15 per cent increase in jewellery demand to 211 tonnes over the period," the World Gold Council observed.

Central banks which have some serious gold reserves were also buyers during the third quarter of the 2015.

In fact, they were net buyers for the 19th consecutive quarter. Purchases by official sector institutions reached 175 tonnes, a level almost matching the record highs in Q3 2014, as the net widened to include new reports from countries such as China and the UAE.

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