Gold demand fell in the third quarter as big investors sold, says WGC

LONDON (Reuters) - Global demand for gold fell in the third quarter to its lowest since the last quarter of 2020 as financial investors sold the metal, the World Gold Council (WGC) said on Thursday.

However, demand from jewellers, central banks and smaller, retail investors buying gold bars and coins was solid, the WGC said.

Total demand for gold over July-September was 831 tonnes, down from 894.4 tonnes in the same period of last year and 1,084.9 tonnes in the third quarter of 2019, the WGC said in its latest quarterly report.

The numbers show the continuing impact of the coronavirus pandemic.

Central banks paused purchases as the virus spread and store closures and job losses caused jewellery sales to plunge, particularly in Asia, but the threat of economic damage triggered huge investor stockpiling, mainly in the West.

Gold is often seen as a safe store of value.

Central bank and jewellery demand have partly recovered as economies revived. Smaller investors are buying at a faster rate than before the pandemic, but larger investors have been fickle.

Exchange traded funds (ETFs) storing gold sold metal last year as economic growth revived and again this year as attention turned to interest rate rises that would make non-yielding gold less attractive.

For the full year, "strong consumer and central bank demand will mitigate losses from ETFs" said the WGC's senior markets analyst, Louise Street.

"Jewellery demand will continue to exceed last year's levels, but investment demand in total will be weaker in 2021, despite healthy bar and coin demand," she said. (Graphic: Gold demand, https://fingfx.thomsonreuters.com/gfx/ce/znvnezgmxpl/WGC%20Q3.JPG)

The WGC forecast demand from jewellers at 1,700–1,800 tonnes for 2021, which would compare to 1,401 tonnes in 2020 and 2,123 tonnes in 2019.

It said it "wouldn't be surprised" if central banks bought more than 450 tonnes this year, up from 255 tonnes in 2020 but below the 605 tonnes they bought in 2019.

Below are numbers for the third quarter and comparisons.

GOLD DEMAND (T)*

Q3 Q2 Q3 % %

2021 2021 2020 change change

Q-on-Q Y-on-Y

Jewellery 442.6 396.6 332.9 12% 33%

Technology 83.8 80.2 77.2 4% 9%

- of which Electronics 68.9 66.4 63.2 4% 9%

- other Industrial 12.0 10.9 10.9 10% 10%

- dentistry 2.9 2.9 3.1 0% -8%

Investment 235.0 283.8 495.0 -17% -53%

-of which bars & coins 261.7 243.1 221.0 8% 18%

- ETFs & similar -26.7 40.7 273.9

Central banks 69.3 190.6 -10.6 -64%

Total demand 830.8 951.2 894.4 -13% -7%

* Source: World Gold Council, Gold Demand Trends Q3 2021

(Reporting by Peter Hobson; editing by David Evans)