Gold demand rises 8% in third quarter - MarketWatch

Gold demand rises 8% in third quarter - MarketWatch: "Global investment demand jumped 27% to 229.7 tons, compared to 180.7 tons the year before, driven by bar and coin consumption in the Asia, the U.S. and Europe.

Gold prices at five-and-a-half-year lows in July and August, combined with fears of a rise in U.S. interest rates by the Federal Reserve, currency concerns in China and persistent concerns over the future of Greece within the Eurozone prompted buying.

Total bar and coin demand increased 33% to 295.7 tons, from 222.2 tons over the same time-frame in 2014.

In China, bar and coin demand shot up 70% to 52.3 tons, up from 30.8 tons in the third quarter last year. In India, bar and coin demand was up 6% at 57 tons, from 54 tons in 2014.

U.S. bar and coin demand rose 207% to 32.7 tons from 10.6 tons during the same period last year, while European bar and coin demand increased 35% to 60.9 tons, from 45.3 tons.

"It's really confirmation that Indian and Chinese demand remains price-sensitive," said Adrian Ash, head of research at BullionVault, an online bullion marketplace. The third quarter "has shown a decent rise because [gold] is at a lower price."

Total demand from China and India, which had declined between March and June, rebounded higher on the back of lower gold prices in the third quarter. The two countries account for around half of global gold demand.

Analysts say that buyers in Asia are bargain-hunters and typically enter the market when prices have fallen significantly in order to pick up the metal more cheaply.

Demand was strongest in India, where the price of gold in rupees fell significantly which encouraged an unseasonal amount of buying.

Indian jewelry demand rose 15% to 211.1 tons in the third quarter, from 184.2 tons over the same period last year. Total demand increased 13% quarter-over-quarter to 268.1 tons, up from 238.2 tons in 2014.

In China, widespread marketing of China's Valentine's Day on August 20 as a gold-buying event also supported modest trade.

Chinese jewelry demand increased 4% in the third quarter to 187.6 tons, from 181.2 tons a year earlier. Overall demand for the precious metal was also up 13% in the third quarter.

Mr. Ash said that it was also to see that Western retail investment is showing a similar trend.

Global gold supply increased 1% year-on-year to 1,100.1 tons. Mine supply rose 3% to 847.8 tons, while recycled gold dropped 6% to 252.3 tons.

In the fourth quarter, religious festivals in India and buying in the run-up to next year's Chinese New Year next year should support gold demand, said Mr. Hewitt.

Nevertheless, the World Gold Council said it is cautious on its outlook.

"After such an exceptional third quarter, it is worth sounding a note of caution for the fourth quarter," said the WGC report.

According to the World Gold Council, its full-year gold demand forecast remains unchanged at between 4,200 tons and 4,300 tons. For China, its 2015 demand outlook is between 900 tons and 1000 tons. For India, its outlook for the year is between 850 tons and 950 tons."



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