Gold prices to get support as central banks maintain historic buying in Q3: World Gold Council

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Also Read: Gold price today: MCX Gold trades lacklustre; how to trade in bullion today? Q3 investment demand of 157 tonnes, although 56% higher YoY, was weak relative to its five-year average of 315 tonnes. Bar and coin investment declined 14% YoY to 296 tonnes, largely due to sharp falls in Europe, the report showed.

Jewellery consumption softened slightly, down 2% YoY at 516 tonnes amid continued gold price strength. “Central bank net buying was back with force this quarter alongside solid bar and coin demand, helping gold prices defy surging bond yields and a strong US dollar.

The reluctance of ETF investors and speculative buyers to actively join the fray so far this year represents an increasing opportunity for price strength in Q4, given the solid underlying case and troughing sentiment," World Gold Council said. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Meanwhile, Gold Exchange-Traded Funds (ETF) and futures investors have shown little appetite for gold while bar and coin demand has remained unexpectedly healthy.

Although rising bond yields now offer an alternative source of real income for many investors, particularly in Europe, WGC attributes most of this year’s ETF outflows to ‘weak hands’. “Underlying support for gold remains, in our view, and is bolstered by escalating geopolitical tension and troughing sentiment as reflected in COMEX futures.

This presents an opportunity for these segments to return to net inflows in Q4," the report said. Also Read: Sparkling returns for gold bond investors this Diwali It noted that the strength in bar and coin demand in China and India is likely to continue, but