India's Q3 gold demand up 10%, global demand declines 6%
In Q3 FY24, India's gold demand surged 10% to 210.2 tonnes, up from 191.7 tonnes in Q3 FY23, according to the World Gold Council (WGC). This increase in Indian gold demand contrasts with the global trend, where there was a 6% decline in worldwide gold demand, totaling 1,147.5 tonnes in the third quarter of 2023. China, the world's largest gold-consuming nation, saw only a marginal uptick in its gold demand, rising from 242.7 tonnes to 247 tonnes in Q3 FY24.
Demand for jewelry, bars, and coins declined
The WGC report highlights that global jewelry demand dipped by 1% to 578.2 tonnes in Q3 FY24 from 582.6 tonnes in Q3 FY23. Elevated gold prices and economic uncertainty were identified as the main factors contributing to the decline, particularly in price-sensitive markets across Asia and the Middle East. Globally, bar and coin demand fell by 14% to 296.2 tonnes in Q3 from 344.2 tonnes a year earlier, with reduced demand in Europe, the US, Turkey, Australia, and Iran.
Investment in Gold ETFs remained weak
Per the WGC report, investment demand for gold ETFs was weak in Q3 FY24, reaching only half of its five-year quarterly average of 315 tonnes at just 157 tonnes. Gold demand for use in technology also decreased by 3% to 75.3 tonnes from 77.3 tonnes due to sluggish demand in the electronics sector, although some industries displayed signs of recovery.
Central banks' gold buying declined, but overall supply increased
Central banks' gold acquisitions dropped by 27% to 337.1 tonnes in Q3 2023, compared to 458.8 tonnes during the same period last year. However, year-to-date net purchases amount to 800 tonnes, suggesting that central bank demand is on track for another robust annual total. Overall gold supply rose by 6% to 1,267.1 tonnes in Q3 from 1,190.6 tonnes a year earlier, with mine production reaching a record 971 tonnes and recycled gold increasing year-on-year to 289 tonnes.
Gold prices will play a crucial role during Dhanteras
WGC India Regional CEO Somasundaram PR stated that gold prices will play a crucial role during the Dhanteras festival and wedding season in the upcoming two months. Dhanteras is regarded as the most auspicious day in the Hindu calendar for purchasing precious metals, utensils, and other valuables. He also noted that consumers have accepted the Rs. 60,000 per 10-gram price point, and a downward adjustment could spark a significant jump in demand during the festive season.
