Recently, the World Gold Council (WGC) released its “Third-Quarter Gold Demand Trends” report, which showed that central banks’ gold purchases worldwide remain at historically high levels, driving quarterly demand (OTC) to 1,147 tons (excluding over-the-counter trading volume)—8% higher than the average demand over the past five years.
　　Data compiled by the WGC show that global central bank demand remained strong in the third quarter, with net purchases totaling 337 tons. Although this figure is lower than the level recorded in the third quarter of 2022, cumulative demand so far this year has already reached 800 tons—a new high since the agency began compiling these data.
　　The WGC stated that central banks’ large-scale gold purchases will continue through the end of this year and remain at a relatively high level throughout 2023.
　　In the third quarter, gold investment demand reached 157 tons, representing a year-on-year increase of 56%, though still below the average level of the past five years. Declining demand in Europe put downward pressure on investment demand for gold bars and coins in the third quarter; although total demand was only 296 tons, it showed a month-on-month increase and was notably higher than the average level over the past five years.
　　In the third quarter, gold outflows from exchange-traded funds (ETFs) continued, largely driven by investor confidence amid persistently high interest rates. However, OTC investments reached 120 tons in the third quarter, partly due to increased demand from Turkey and higher reserve accumulation in other markets.
　　Affected by rising gold prices, demand for gold jewelry has fluctuated. Consumers in many countries around the world are facing higher living costs, causing gold jewelry demand to drop to 516 tons—a 2% decrease year-on-year.
　　In the third quarter, total gold supply rose by 6%, with cumulative production reaching 2,744 tons to date. The continued rise in gold prices drove recycling volumes to 289 tons, an 8% increase year-on-year.
　　“Although interest rates have risen and the U.S. dollar has strengthened, gold demand remained robust throughout the year. Our report shows that gold demand this quarter was stable compared to the average demand over the past five years,” said Louise Street, Senior Market Analyst at the WGC. “Looking ahead, given the intensifying geopolitical tensions and strong central bank demand, we expect gold demand to see an unexpectedly significant increase.”