Gold demand was 964.3 t in Q3, just 6.2 t higher y-o-y. Robust central bank buying and a 13% rise in consumer demand offset large ETF outflows.

Bar and coin demand jumped 28% to 298.1 t as retail investors took advantage of the lower gold price and sought protection against currency weakness and tumbling stock markets.

Jewellery demand rose 6% in Q3 as lower prices caught consumers’ attention.

A growing number of central bank buyers saw demand in this sector rise 22% y-o-y to 148.4 t, the highest level of quarterly net purchases since 2015.

Technology registered its eighth consecutive quarter of y-o-y growth, up 1%. Sharp outflows in gold-backed ETFs offset growth across much of the gold market.

Price-conscious consumers took advantage of a declining gold price to boost Q3 demand

Demand for jewellery increased by 6% y-o-y, to 535.7 t. India, China and several South-East Asian markets saw respectable y-o-y increases, while demand in Iran, Turkey and the UAE fell significantly.


After two consecutive quarters of y-o-y declines, Q3 saw jewellery demand in India grow by 10% to 148.8 t.

While demand was firm during the quarter – virtually in line with the five-year quarterly average of 147.5 t – the y-o-y growth should be viewed in comparison to a relatively
weak Q3’17.

Demand suffered in the third quarter last year, as some purchases were brought forward into Q2 in anticipation of the new pan-India Goods & Services Tax.

And in August 2017, gold jewellery retailers grappled with the extension of the Prevention of Money Laundering Act (PMLA) and its application to the gems and jewellery sector.

Q3’18 demand was boosted in early August when the local gold price dipped below Rs29,700/10g – the lowest level since January.

This attracted bargain-hunting consumers who had been waiting for a good time to
enter the market. Mid-August saw a sharp rise in the local gold price as the rupee depreciated against the US dollar.

Outside the traditional festival and wedding season, demand eased towards the end of the month and into September. Jewellery demand was further dampened by the inauspicious period of Shraaddh (also known as Pitru Paksha), a time when gold purchases are put on hold.


Chinese jewellery demand totalled 174.2 t in Q3, a 10% increase over Q3’17. Demand benefitted from the Qixi and Mid-Autumn festivals that took place during the quarter but sales were lacklustre during the National Holiday week as people chose travel over shopping, especially those in tier 1 and 2 cities.

Jewellery sales during the Qixi festival (China’s equivalent of Valentine’s Day) were strong. Over recent years, retailers across all product categories have developed this
festival as a buying occasion, a strategy that has proved especially effective amongst younger consumers.

And despite the major annual jewellery fairs in Shenzhen and Hong Kong being slightly disrupted by Typhoon Mangkhut, several manufacturers reported healthy sales growth.

Middle East and Turkey

Middle Eastern jewellery demand remained under pressure in the face of geopolitical stress, down 12% y-o-y to 37.7 t. Iranian jewellery demand saw the largest fall in the region for the second consecutive quarter, down almost 60% y-o-y in Q3. Y-t-d, demand has shrunk by 36%, suffering under renewed economic sanctions and the steep decline in the rial.

By contrast, VAT-exempt bars and coins benefited from a flight to safety.

The trajectory of the gold price during the quarter, set against a backdrop of political
and economic uncertainty, convinced consumers to remain on the sidelines. After spiking earlier in the year, local prices again jumped in mid-August to an intra-day high of
TL273/g, when the lira fell to an all-time low against the US dollar.

This prompted a wave of recycling rather than fresh jewellery (and investment) purchases. As high price volatility continued throughout Q3, jewellery buyers shied away from spending decisions.

Jewellery demand in the UAE and Saudi Arabia saw contrasting fortunes. In the UAE, jewellery demand fell to 6 t (-13% y-o-y) as the market continued to feel the impact of the 5% VAT introduced last year, as well as a general economic downturn and fears over job security.

Depreciation of the Indian rupee also affected demand from the important Indian expat community.

The West

Gold jewellery demand in the US remained buoyant, growing 4% to 28.3t in Q3. Economic confidence was high throughout the quarter, with the S&P 500 index rising by over 7%.

This has helped boost discretionary spending on gold jewellery, especially plain yellow gold pieces.

Retailers such as Tiffany’s and Signet have reported positive results in recent months, supporting a more optimistic outlook for the US jewellery market.

Europe-wide jewellery demand was little changed in the quarter, up 1% y-o-y to 12.7 t. But a more mixed picture emerges at country-level. Both France and Italy experienced economic sluggishness, and the distraction of the World Cup in the former weighed on jewellery demand.

In the UK, uncertainty around Brexit remained a drag on demand.

Other Asian countries

An uplift in jewellery demand was seen across east and south-east Asia. Growth in jewellery demand across all key Asian markets was a direct result of lower local gold
prices during the quarter.

In Thailand, fears of further currency depreciation as well as a dip in the international gold price attracted bargain hungry consumers, increasing jewellery demand by 12% to 3.1 t.

Gold buying was boosted by fears of further devaluation in the local currency, despite a small recovery in recent months. Jewellery demand grew 11% y-o-y in both Indonesia and Malaysia, driven principally by lower local gold prices, while fears of further falls in the rupiah supported safe-haven buying in Indonesia.

In Vietnam, jewellery demand benefitted from lower gold prices, strong domestic growth and currency depreciation, rising 10% y-o-y.