(Kitco Information) – Funding demand, in an setting of low rates of interest and never-ending uncertainty and turmoil, stays the singular driving power within the gold market, in response to analysts at Refinitiv.
In a report final week, the analysis agency mentioned that bodily gold demand fell by 562 tonnes within the third quarter, down 30% in comparison with the third quarter of 2019. Nonetheless, dismal bodily demand has had little affect on costs as gold pushed to an all-time excessive above $2,000 in early August.
Commodity analysts at Refinitiv mentioned that gold costs averaged $1,909 an oz between July and September, up 27% from the second quarter and up 30% from final 12 months.
Though bodily demand is predicted to proceed to wrestle, analysts at Refinitiv count on gold costs to finish the 12 months on a robust footing.
“It’s within the close to time period that we’re more likely to see elevated volatility, uneven buying and selling and fluctuations within the inventory markets and the gold value, significantly within the run-up to U.S. presidential elections,” mentioned Cameron Alexander, director of valuable metals analysis at Refinitiv within the report.
“Whereas we might even see gold consolidating or being caught up in a broader sell-off within the quick time period, gold ought to be the one to profit from rising dangers revolving across the second COVID-19 outbreak and the worldwide financial turmoil, and we might effectively see the yellow metallic hit a recent report earlier than the year-end,” he added.
Wanting on the demand image for the third quarter, the analysis agency famous that international jewellery demand had the largest affect on the bodily market. International gold jewellery contracted by 314 tonnes, a drop of 23% in comparison with the third quarter of 2019.
“International locations continued to battle in opposition to the COVID-19 pandemic, which took a critical toll on the worldwide economic system, unemployment charges, family incomes and client demand,” the analysts mentioned.
Central financial institution demand is one other necessary pillar within the gold market that contracted within the third quarter. Refinitiv mentioned that for the primary time in a decade, central banks had been internet sellers of gold, promoting 13 tonnes between July and September.
“The shift was pushed by an absence of purchases from Russia and China, in addition to a major rise in product sales as international locations continued the battle in opposition to COVID-19, which has taken a extreme toll on the international economic system, with maybe some additionally benefiting from the gold’s astonishing value efficiency in current months,” the analysts mentioned.
Wanting on the international gold provide, Refinitiv mentioned that mine manufacturing fell 2% within the third quarter in comparison with final 12 months; nevertheless, sturdy recycling made up for a drop in mine manufacturing, the report mentioned.
“Whereas the speed of decline is quite a bit much less pronounced than in the earlier quarter, many mines continued to function at restricted capability in order to take care of COVID-19 security restrictions,” the analysts mentioned.
In whole, the worldwide provide elevated 10% within the third quarter.
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