Central Bank Gold Demand Rises in Q3 Amid Global Unrest

Central banks around the world maintained their appetite for gold in the third quarter of 2023, with their purchases totaling 337 metric tons, the World Gold Council (WGC) third quarter report shows. Board analysts suggest that this continued central bank activity is indicative of strong and sustained demand for gold, which could lead to a strong year-end total for 2023.

World Gold Council Report Shows Central Banks Increase Gold Holdings Amid Economic Shifts

The figure of 337 metric tons of gold came close to, but did not exceed, the record set in the third quarter of 2022. However, it brought purchases so far this year to a record 800 metric tons. The WGC report states that this continued central bank activity indicates continued demand for gold, which could lead to another strong year-end total for 2023.

On Friday, the price of gold per ounce reached a high of $2,002, but has since fallen below the $2,000 mark. In the last 30 days, gold has gained more than 9% against the US dollar and is up 22% in the last 12 months. In the report, the WGC notes that central bank purchases have become an important driver of demand.

The board’s report also notes that, excluding over-the-counter (OTC) transactions, gold demand in the third quarter exceeded its five-year average by 8%, despite a 6% decline from the previous year, totaling 1,147 metric tons. . . When including over-the-counter and stock flows, global demand increased 6% year-on-year to reach 1,267 tonnes.

The report goes on to state that gold investment demand in the third quarter was 157 metric tons, a 56% increase from the previous year, although it fell short of the five-year average of 315 metric tons. Gold exchange-traded funds (ETFs) around the world recorded a decline of 139 metric tons in the third quarter, which, while notable, was lower than the 244-ton outflow seen in the same quarter last year.

Louise Street, senior markets analyst at the World Gold Council, summed up the situation: “Demand for gold has been resilient throughout this year and performed well in the face of headwinds from high interest rates and a strong US dollar. “Our report shows that demand for gold is healthy this quarter compared to the five-year average.”

In October 2023, in a context of increasing tensions in Israel, the value of precious metals and bitcoin (BTC) increased in a context of growing economic uncertainty. In the last month, gold appreciated 9.4% and BTC rose 25%. As trading closed this week, US stocks showed resilience and finished strong as Treasury yields retreated, and all four primary indexes ended Friday in positive territory.
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