According to a report released by the World Gold Council ((WGC)), global gold investment fell by more than half in the third quarter of this year compared with the same period last year, and the outflow of gold ETF is the main reason. Global gold investment demand fell 53 per cent to 235 tons in the third quarter. Of this total, investment in gold bars and coins rose 18 per cent year-on-year to 261.7 tons, as "weak prices this quarter are seen by many as a buying opportunity". But the increase was offset by an outflow of 26.7 tonnes of gold ETF. Gold ETF outflows are concentrated in North America, the report said. "as gold prices fall, a larger and more liquid ETF is likely to flow out because of its liquidity." Looking ahead, the report said global gold investment demand was expected to "remain strong" in the fourth quarter
According to the latest Global Gold demand Trends report released by the World Gold Council, total global gold demand reached 831 tons in the third quarter of 2021, down 7% from the same period last year and 13% from the previous month, mainly due to a small outflow of gold ETF positions. The decline in global gold ETF positions offset the continued recovery in gold demand in other sectors. Total global gold supply fell 3 per cent year-on-year due to a significant drop in recycled gold supply.
The report also points out that although the growth rate has slowed compared with recent quarters, the pace of global central bank purchases has not stopped. Global gold reserves rose by a net 69 tons in the third quarter, with an overall increase of nearly 400 tons in the first three quarters of this year. Even if the amount of net purchases by central banks around the world was small in the third quarter, it was still an improvement from the small net sales in the third quarter of 2020. Continued economic recovery will benefit jewellery demand and technology gold; at the same time, we expect continued inflation concerns to support investment demand for gold, but current ETF demand for gold remains weak compared with record inflows in 2020. In addition, the positive attitude of central banks will make this year's net purchases higher than the average in previous years. Affected by the sustained recovery of the electronics industry, the global demand for gold for science and technology is 84 tons, an increase of 9% over the same period last year, and has returned to the quarterly average before the epidemic. In addition, against the backdrop of a sustained global economic recovery, global demand for gold jewelry performed well: demand rebounded 33 per cent in the third quarter from a year earlier to 443 tons.
