Rising investor gold demand offsets lower jewellery buying in Q3, says industry body

* Gold jewellery consumption down 12% amid high prices * Demand from central banks is weakening, down 49% in Q3 * Including OTC, total gold demand rose by 5% in Q3 * Mine supply hit Q3 record, recycling rose by 11% By Polina Devitt LONDON, Oct 30 (Reuters) - Global gold demand excluding over-the-counter (OTC) trading was steady year-on-year at 1,176.5 metric tons in the third quarter as higher investment activity offset reduced jewellery consumption, the World Gold Council (WGC) said on Wednesday. Spot gold prices XAU= are up 34% so far this year, heading for the highest annual growth since 1979, due to uncertainty surrounding next week's U.S. presidential election, lower interest rates, geopolitical risks and portfolio diversification. Gold hit a record of $2,771.61 per ounce on Tuesday. "Resurgent professional flows combined with solid bar and coin investment will offset weaker consumer demand and slower central bank buying" for gold in 2024, the WGC, an industry body whose members are global gold miners, said in a quarterly report. Total demand for gold, including opaque OTC trading, rose 5% to 1,313 tons, a record for a third quarter, the WGC said. It estimates the OTC flows - investment from institutional, high-net-worth investors and family offices - at 136.5 tons in July-September, up 97%. Physically-backed gold exchange traded funds (ETFs) saw the first positive quarter since the first quarter of 2022 with inflows of 95 tons, while bar and coin investment fell 9%. Gold jewellery consumption, the biggest category of physical demand, fell by 12% in the third quarter despite strong growth in major import market India, while global central banks, which actively bought gold in 2022-2023, reduced purchases by 49%. On the supply side, mine production increased by 6% to reach a third-quarter record, and recycling rose by 11%. Gold supply and demand by WGC*: Q3'23 Q2'24 Q3'24 Q3 change y/y (%) Supply Mine production 935.7 907.0 989.8 6 Net producer hedging 23.8 8.5 0.2 -99 Recycled gold 290.1 336.4 323.0 11 Total supply 1,249.6 1,251.9 1,313.0 5 Demand Jewellery fabrication: 582.2 408.2 543.3 -7 - Jewellery consumption 520.0 390.9 458.6 -12 - Jewellery inventory 62.1 17.2 84.6 36 Technology: 77.3 80.2 83.0 7 - Electronics 63.3 66.9 69.0 9 - Other industrial 11.7 11.1 11.8 1 - Dentistry 2.3 2.3 2.2 -4 Investment: 156.8 266.1 364.1 132 - Total bar and coin: 295.9 273.2 269.4 -9 of which bars 207.7 198.4 198.4 -4 of which official coins 54.3 49.6 31.3 -42 of which medals 34.0 25.3 39.8 17 - ETFs/similar products -139.1 -7.1 94.6 - Central banks, other inst. 363.9 202.2 186.2 -49 Gold demand 1,180.2 956.7 1,176.5 0 OTC and other 69.4 295.2 136.5 97 Total demand 1,249.6 1,251.9 1,313.0 5 LBMA gold price ($/oz) 1,928.5 2,338.2 2,474.3 28 *Source: ICE Benchmark Administration, Metals Focus, World Gold Council. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ WGC 2024 gold demand forecast as of Q3 https://tmsnrt.rs/4hlYIeF WGC Q3 gold demand https://tmsnrt.rs/3UqAt4Y ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Polina Devitt; editing by Barbara Lewis) (([email protected]; Reuters Messaging: [email protected]))