The World Gold Council’s latest Gold Demand Trends report reveals that global gold demand (excluding OTC) in Q3/2022 hit 1,181 tons, up 28% year-on-year.

Strong demand pushed the year-to-date total to its pre-Covid levels. Gold demand was bolstered by consumers and central banks, although there was a notable contraction in investment demand.

In Vietnam, overall consumer demand reached 12.0 tons in the third quarter of 2022 from 3.3t in Q3/2021, up 264% year-on-year.

Total bar and coin demand showed a similar increase at 8.5 tons in Q3 2022 from 2.4t in Q3 2021, up 254% from the same quarter in 2021. Jewelry demand was 3.5 tons in Q3 2022 from 0.9t in Q3 2021, up 290% year-on-year.

Delving into the spike in demand compared to the same quarter in the previous year, Andrew Naylor, Regional CEO, APAC (ex China) and Public Policy, said: “The sizable increase in consumer demand across bar and coin, as well as jewelry demand is largely due to comparably much weaker demand in the third quarter of 2021.”

“With Covid-19 restrictions being lifted, economic activity is resuming, and the Vietnamese recovery has been especially strong. Salary cuts have been reversed, and companies are returning to full employment. This has contributed to the surge in demand,” he said.

Globally, investment was down 47% year-on-year, as ETF investors responded to a challenging combination of markedly higher interest rates and a strong US dollar with significant outflows of 277t.

These movements, alongside weakness in OTC demand and negative sentiment in futures markets, hampered gold’s price performance – contributing to an 8% quarter-on-quarter drop in the price during Q3/2022.

Louise Street, Senior Markets Analyst at the World Gold Council commented: “Despite a shaky macroeconomic environment, demand this year has reflected gold’s status as a safe haven asset, underscored by the fact that it has outperformed most asset classes in 2022.”

“Looking ahead, we anticipate central bank buying and retail investment to remain strong and that could help offset potential declines in OTC and ETF investment that may prevail if the dollar strength persists. We also expect to see jewelry demand continue to perform strongly in some regions such as India and Southeast Asia, while the technology sector will likely witness further decline in the face of economic deceleration.”

Mai Lan