Gold demand hits record high in Q3, first $100-billion quarter

It’s been a glittering year for gold, which has been smashing price and other records and the rampage just keeps on going.

In the third quarter (Q3) of this year, the worldwide value of demand for gold surged by 35% year-on-year, exceeding $100-billion for the first time, according to the latest quarterly Global Demand Trends report of the World Gold Council unveiled on Wednesday.

This was driven by a combination of physical demand in tonnes and record prices.

Total gold demand rose by 5% to 1,313 tonnes, a Q3 record, while the average gold price for the quarter was 28% higher year-on-year at a record $2,474 an ounce. It all adds up to the record quarter of more than $100-billion in demand.

“Investment flows were key to gold’s performance in Q3. Falling interest rates, geopolitical uncertainty, portfolio diversification and momentum buying were among the key drivers,” says the report.

Indeed, gold’s scorching record price rally has become a red rag on the investment front and the bulls are charging.

“Global gold ETF inflows (95 tonnes) were a major driver of growth; Q3 was the first positive quarter since Q1 2022, with a year-on-year swing from hefty (-139t) Q3 2023 outflows,” notes the report.

Production shifts up

Gold producers are scrambling to make hay while the sun is shining. Gold production grew by 6% year-on-year to another quarterly record and total supply was up by 5% year-on-year to a new record of 1,313 tonnes.

In short, the gold industry has been setting record after record in 2024, with one record feeding off the other in a frenzy which shows no signs of abating.

Since Q3 ended on 30 September, gold’s price has surged to record highs of more than $2,700 an ounce. The Bank of America and Citibank are among the forecasters who see $3,000 an ounce being reached by the middle of next year.

Macroeconomic and political uncertainty — the US presidential election next week remains a coin toss — combined with rising geopolitical tensions and global debt levels have all boosted gold’s “safe haven status”.

Meanwhile, demand from emerging market central banks remains robust as they seek to diversify their portfolios away from dependence on the US dollar.

If a bubble is forming it is going to burst with a bloody big bang. But for now, global markets are going for gold. DM