Global Gold Prices Hit a New Quarterly High

According to gold supply and demand statistics released by the World Gold Council (WGC) on October 30, gold demand reached its highest quarterly level since records began in 2000. This surge was driven by the impact of US monetary policy, safe-haven buying to mitigate geopolitical risks, and a sharp rise in gold prices, leading to accelerated inflows of investment funds. Some analysts suggest that the “fear of being left behind in a rising market” fueled the demand increase.

The average price of spot gold（金価格） in London during July-September was $3,456.5 per ounce, a 40% increase year-on-year. Compared to the previous quarter, the price rose by more than $170.

Gold demand in July-September increased by 3% year-on-year, reaching 1,313.1 tons. The driving factor was investment-oriented purchases, which reached 537.2 tons, 1.47 times that of the same period last year.

Net inflows into physical gold-backed exchange-traded funds (ETFs) swelled to 221.7 tons, 2.34 times that of the same period last year. In terms of value, gold purchases reached $26 billion, surpassing the previous quarterly record of $24 billion set in April-June 2020 (during the chaos of the COVID-19 pandemic), setting a new record for a single quarter.

Funds based in North America and Europe saw significant inflows into ETFs, with 139 tons and 70 tons respectively, accounting for over 90% of the total inflows. Takahiro Morita, an advisor at the WGC, stated, “In addition to demand as a traditional safe-haven asset, purchases driven by FOMO (fear of missing out) have increased dramatically amidst the sharp rise in gold prices.”

Investment demand also showed strong performance in gold bar and coin purchases, reaching 315.5 tons, 1.17 times that of the same period last year. Demand from countries such as Japan (7.26 times) saw significant growth.

Besides investment demand, central bank purchases also remained strong. Although central banks tend to halt purchases when gold prices are high, purchases from July to September still increased to 219.9 tons, 1.1 times that of the same period last year. This also represents an increase compared to the previous quarter. Global central banks purchased a total of 634 tons of gold from January to September. While this is a slower pace than the three-year average of 1,000 tons purchased annually until 2024, it remains a relatively high level of accumulation compared to historical levels.

On the other hand, jewelry demand continued to decline. Rising gold prices deterred consumers, resulting in a 19% year-on-year decrease in jewelry demand, to only 371.3 tons. India, a major consumer of gold jewelry, saw a 31% year-on-year decrease in demand, while China experienced a significant 18% decline. In these two countries, demand for gold bars and coins, which are more likely to retain value, replaced demand for gold jewelry.

The New York futures market (the most active contract), a benchmark for international gold prices, rose to $4,398 per ounce on October 20, 13.5% higher than at the end of September. Amidst concerns about the creditworthiness of US regional banks due to the partial shutdown of US government agencies leading to delays in the release of key statistical data, investors bought gold to diversify risk. However, profit-taking spread, causing prices to plummet on the 21st. Gold prices fell to $3,901.3 on the 28th.

Ross Norman, CEO of the UK’s *Metal Daily*, noted regarding ETF inflows: “Unlike in Asia, institutional investors in Europe and the US tend to take short-term profits.” While most market sentiment is bullish on the medium- to long-term upward trend of gold prices, prices are likely to remain highly volatile in the short term.