The World Gold Council has highlighted the resilience of the global gold market in what is traditionally a slower quarter for gold demand. Continued growth in consumer demand across the globe, and the strength of Asian gold demand overall, reinforces the patterns first seen at the beginning of 2013, clear evidence of the self-balancing nature of the global market.

Stating this in its latest Gold Demand Trends report ‒ the leading industry resource for data and opinion on world-wide gold demand ‒ the council said overall demand for gold in Q3 2013 had been 869t ‒ down 21% on the same period a year ago. However, demand had remained strong across most countries and sectors. The exceptions were gold-backed ETFs, which had net outflows of 119t this quarter, compared to 402t in Q2 2013, and India where the result of government intervention in the Indian gold market was to reduce demand by 71t this quarter.

The report, which covers the period July to September 2013, added that taking the year as a whole so far, the jewellery, bar and coin sectors were showing year-to-date increases, while technology demand remained robust. ETF investment demand was the notable exception, having weakened this year.

Global consumer demand ‒ the strength of jewellery and bar and coin demand in 2013 to date can be seen when compared against the first three quarters of previous years. As of the end of Q3 of 2013, demand stood at 2,896t ‒ 26% higher than the same figure in 2012.

Global demand for jewellery ‒ far and away the largest component of global demand ‒ was 487t in Q3 2013, compared with 462t in the same period last year, an increase of 5%. After eight years of decline, the US jewellery market had its third consecutive quarter of growth with a shift to higher carat items.

Global bar and coin demand ‒ also showed a year-on-year increase, reaching 304t, a rise of 6% compared to the same period last year. This takes overall investment in bars and coins so far this year to 1,252t, a rise of 36% compared to the first three quarters of 2012.

Managing director, investment at the World Gold Council, Marcus Grubb commented: “Consistent with the first two quarters of 2013, the global gold market remains resilient, underpinned by the continued shift in demand from West to East, strong demand in consumer categories and solid central bank and technology sectors”.

“The growth we are seeing in jewellery, bars and coins in particular, demonstrates once again the unique diversity of gold demand, as different sectors increase in prominence at different points in the global economic cycle, clear evidence of the ebb and flow of what is an extremely liquid market.”

The restrictions introduced by the Indian government on importing gold through official channels had the intended effect of substantially suppressing demand, with total gold consumption in India standing at 148t in Q3, compared to 310t in Q2 of this year.

For the 11th consecutive quarter, central banks were net buyers of gold, purchasing 93t. Meanwhile demand in the technology sector was stable, at 103t.

The average gold price for the quarter was US$1,326/oz, down 20% on the same quarter last year.  In value terms, gold demand in Q3 2013 was US$37 billion, down 37% compared to Q3 2012.

Source: World Gold Council. For more information, click here.