Central banks globally demonstrated continued interest in gold during the third quarter of 2023, a trend revealed in the World Gold Council’s (WGC) quarterly report. According to analysts from the council, this steady activity by central banks signifies sustained and robust demand for gold, hinting at a potentially strong total for the year-end of 2023.
Central banks purchased 337 metric tons of gold in Q3
The data from the WGC’s report unveils that central bank purchases in this quarter amounted to 337 metric tons of gold. Though not surpassing the record established in the third quarter of 2022, this quantity did drive the year-to-date purchases to an all-time high of 800 metric tons. The report from the WGC emphasizes that this ongoing activity by central banks indicates a consistent demand for gold, possibly culminating in another robust year-end total for 2023.
The price of gold per ounce soared to $2,002 on Friday but has since dipped below the $2,000 mark. In the last 30 days, gold witnessed a gain of over 9% against the U.S. dollar, marking a 22% increase over the past 12 months. The report by the WGC underscores that central bank purchases have emerged as a pivotal factor influencing demand. Furthermore, the WGC’s report highlights that gold demand in the third quarter surpassed its five-year average by 8% when excluding over-the-counter (OTC) transactions.
Precious metals and crypto surge as economic uncertainty persists
Despite a 6% year-over-year decrease, the total demand stood at 1,147 metric tons. Factoring in OTC and stock flows, overall demand registered a 6% increase from the preceding year, summing up to 1,267 metric tons. The analysis also points out that gold investment demand in the third quarter reached 157 metric tons, marking a 56% increase compared to the previous year. However, this figure fell short of the five-year average of 315 metric tons. Notably, gold exchange-traded funds (ETFs) globally experienced a decrease of 139 metric tons in the third quarter.
Though significant, this decline was less pronounced than the 244-ton outflow witnessed in the same quarter of the prior year. Louise Street, the senior markets analyst at the World Gold Council, summarized the situation by highlighting the resilience of gold demand despite challenges posed by high-interest rates and a strong U.S. dollar throughout the year. The council’s report emphasized the health of gold demand in this quarter when compared to its five-year average.
Since October 2023, amidst escalating tensions in Israel, the value of precious metals and Bitcoin (BTC) has surged amid mounting economic uncertainty. Over the past month, gold has appreciated by 9.4%, while BTC has seen a substantial 25% surge. Ending the week’s trading, U.S. stocks displayed resilience, concluding on a positive note as Treasury yields retreated, with all four primary indices closing Friday in positive territory.
