Global demand for gold jumped 18% year-on-year to 1,133.4t in the third quarter, reversing a weaker trend earlier this year because of strong buying by investors and a lower gold price, the World Gold Council (WGC) said on Wednesday.
Investment demand rose 56% to 382.1t for the third quarter as heightened levels of economic and financial uncertainty stirred safe-haven buying, WGC said in its quarterly Gold Demand Trends.
"There is a growing awareness around the world among investors of the long-term strategic benefit that gold brings to a properly balanced investment portfolio," George Milling-Stanley, WGC`s manager of investment and market intelligence, said.
"A lot of people see these different bail-out rescue plans as having major inflationary implications for the big economies of the world, particularly in the US but in Europe as well," Mr Milling-Stanley said.
The report, whose data were compiled independently by research firm GFMS Ltd for the industry-sponsored WGC, showed that demand for gold exchange-traded funds rose 8% to 150t for the quarter.
Total jewellry consumption in the third quarter climbed 8% to 647.6t year-on-year, thanks to a fall in gold price and sharply higher consumption by top bullion buyer, India, WGC said.
Total demand from India grew 31% to 249.5t for the third quarter, helped by increases in both jewellry and retail investment buying, the WGC said.
However, third-quarter industrial demand dropped 11% to 103.7t on weaker buying from the electronics sector.
For the fourth quarter, the WGC said that strong demand for gold jewellry, bars, coins and ETFs that was evident in the third quarter appeared to have continued into the early fourth quarter.
The WGC said that anecdotal reports suggested that India saw buoyant sales during the Hindu festival of Diwali in mid-October, traditionally a major gold-buying event.
"Typically the fourth quarter is the biggest one for jewellry demand, and the safe haven appeal is not going to go away. The one thing that would hurt jewellry demand is that if the market remains volatile," Mr Milling-Stanley said.
"Investment demand is likely to be the star as far as Q4 is concerned given where we stand at this point," Mr Milling-Stanley said.
