MUMBAI: Global demand for gold fell 11 percent in the third quarter on an annual basis, as buying in key market China dipped because of its slowing economy, the World Gold Council said yesterday.
Worldwide demand fell year-on-year in the July-September period to 1,084.6 tonnes worth an estimated $57.6bn as prices on average were 3 percent lower than the record levels seen a year earlier, the WGC’s latest report said.
Reduced demand for gold from jewellery, investments and technology sectors offset a rise in buying from global central banks amid economic uncertainty.
Buying in China fell 8.0 percent year-on-year to 176.8 tonnes due to the “slowing of its economy which had a negative impact on consumer sentiment”, the report said. But Marcus Grubb, managing director in investment at the WGC, said that gold would continue to be bought to preserve capital, amid “a backdrop of continued global economic uncertainty”.
India, the world’s largest consumer and importer of the precious metal, saw a slight improvement in demand in the quarter, the council said, with consumption of 223.1 tonnes, up 9.0 percent from a year earlier.
India and China, which have both been battling high inflation, together account for about half of the world’s gold demand, and China is forecast to overtake India as the market leader by the end of the year.
Meanwhile, gold prices slid more than 1 percent to a one-week low following falls in equity markets, but worries about the approaching US ‘fiscal cliff’ underpinned prices.
World equity markets fell for a seventh day, hit by evidence that Europe’s debt crisis has stalled economic growth and by persistent concern over the budget problems in the US.
Losses in stocks helped push spot gold down 0.79 percent to $1,712.4 by 1528 GMT, clawing back some territory after hitting a one-week low of $1,704.69, while US gold for December was down $17.40 an ounce to $1,712.70.
“The fall to session lows in gold is driven by equities. And the end of mining strikes in South Africa is having an impact on platinum group metals, and gold too,” Peter Fertig, a consultant with Quantitative Commodity Research, said.
Platinum eased 1.06 percent to $1,566.25, while sister metal palladium was last at $632.47, down 0.15 percent. Silver was down 0.67 percent at $32.43 an ounce.
Among other commodities, Brent crude rose towards $111 a barrel as Israel’s bombing of the Gaza Strip sparked worries around the supply of oil from the Middle East. Reuters
