by Peter Schiff, Schiff Gold:

Gold demand was up 3% in the third quarter, coming in at 1,107. 9 tons, according to the Gold Demand Trends Q3 2019 report put out by the World Gold Council.

Record inflows of gold into ETFs overcame weakness in the jewelry, and gold bar and coin markets to push overall demand higher.

Gold mine output dropped slightly, but a surge in recycling drove a modest gain in supply.

Gold-backed ETFs took in 258 tons of gold in Q3. ETF gold holdings reached all-time highs in September, hitting 2,808 tons. That eclipsed the previous record set back in 2012 when the price of gold was near $1,700 per ounce. According to the WGC, “Accommodative monetary policies, along with safe-haven and momentum buying, drove demand.”

Central bank gold buying remained healthy, adding 156.2 tons in Q3. But that represented a year-on-year decrease when compared to the record-shattering third quarter of 2018. Still, central bank gold purchases remain 12% ahead of 2018’s record numbers.

The big drop in demand compared to last year was in the jewelry and gold bullion markets.

Gold jewelry sales were down 16% compared to Q3 2018. The exception was in North America, where gold jewelry sales rose for the 11th consecutive quarter. Price pressure was exacerbated by concerns over the health of the global economy. This led many consumers to moderate their buying plans, particularly in Asia and the Middle East.

Meanwhile, bar and coin sales fell by half, coming in at 150.3 tons on the quarter. That was the lowest level since 2010. There was one country where retail investment grew – Turkey.

High prices impacted the jewelry, along with the bar and coin markets. The gold price rose by 5% during Q3, finding sustained support at around $1,500 per ounce.  In many countries, the price of gold hit all-time highs during the third quarter, including in India, which accounts for a significant portion of global jewelry sales. In the bullion markets, retail investors took the opportunity to lock in profits and defer purchases, according to the WGC.

Technology demand for gold fell 4%. The WGC said continued concerns about a global economic slowdown stifled demand. But the nascent 5G infrastructure helped to slow the decline in the important electronics sector.

On the supply side, mine output was fractionally lower in Q3 at 877.8 tons. That’s bout a 1% decline year-on-year.  On a year-to-date basis, mine production is at 2,583.4 tons, virtually unchanged from the same period in 2018.

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