Demand for gold fell 7% year-on-year to 831t in Q3 2021. This decline was driven almost exclusively by ETFs, which shifted from very strong demand in Q3 2020 to small outflows in the quarter that just ended, overshadowing the strength in other sectors of demand realized during the same period.
Jewelry, technology, bars, and coins saw significantly higher demand compared to what happened in 2020.
Instead, the demand from the central banks turned out to be decreasing despite in any case showing a positive growth trend showing a solid improvement compared to the net sales recorded in the third quarter of 2020 made to deal with the consequent crisis of the pandemic.
On the other hand, the supply sector recorded a decrease of 3% on an annual basis due to a significant drop in the sale of gold by private individuals due to restrictions on the movement of people.
The sector that has most driven the recovery of the gold sector is undoubtedly jewelry which has continued to draw strength from the ongoing global economic recovery: demand in the third quarter rebounded by 33% on an annual basis to 443 t.
Investment in bars and coins also saw strong private interest, recording an 18% year-on-year increase to 262t. The sharp decline in the price of gold in August was seen by many as a great opportunity to buy physical gold.
However, while there was a marginal decline in the global gold ETF segment (-27t), this had a significantly disproportionate impact on the year-on-year change in gold demand, due to strong inflows in Q3 2020 of 274 t when the demand for safe havens increased exponentially.
As mentioned, the central banking sector also continued to buy gold, albeit at a slower pace than in recent quarters. Global reserves in total grew by 69t in the third quarter and nearly 400t year-to-date.
The question of gold in the technology sector, despite the Chip crisis, grew by 9% on an annual basis, driven above all by the continued recovery in demand by the electronics manufacturing companies, with a demand of 84 t which returned in line with the quarterly averages pre-pandemic.
