Gold demand rises as investors grow nervous – WGC

    By Peter Hobson
    LONDON, Nov 5 (Reuters) - A slew of investment in
gold-backed exchange traded funds (ETFs) offset a decline in
purchases of jewellery, bars and coins to push global gold
demand slightly higher in the third quarter, the World Gold
Council (WGC) said on Tuesday. 
    The world's appetite for gold was 1,107.9 tonnes over
July-September, 3% more than in the same period last year, the
WGC said in its latest Gold Demand Trends report.
    That took demand in the first three quarters to 3,317.5
tonnes - the most for any January-to-September period since
2016, it said. 
    "The continued surge into ETFs more than compensated for
weaker demand elsewhere," said the WGC's head of market
intelligence, Alistair Hewitt.
    Gold is traditionally seen as a safe investment in uncertain
times, and the worsening health of the global economy triggered
a flood of interest from financial investors such as asset
managers and hedge funds. 
    Holdings of gold-backed ETFs rose by 258.2 tonnes during the
third quarter and touched a new all-time high, the WGC said. 
    But with gold prices rocketing to six-year highs in
dollar terms -- and even higher peaks when priced in other
currencies that have weakened against the dollar -- retail
consumers were put off.
    Demand for jewellery at 460.9 tonnes in the third quarter
was down 16% from the same period a year ago, while purchases of
bars and coins halved to 150.3 tonnes, the WGC said. 
    Hewitt forecast full-year consumption in China at 850-950
tonnes and in India at 700-750 tonnes, down from predictions of
900-1,000 tonnes and 750-850 tonnes three months ago.
    Central banks added 156.2 tonnes to their reserves in the
third quarter, down sharply from July-September last year, the
WGC said. 
    However, central bank demand over the first nine months of
the year at 547.5 tonnes is still 12% up from last year and
Hewitt said full-year purchases would likely be between 600 and
700 tonnes -- on a par with last year's more than 50-year high
of 651.5 tonnes.
    Supply of gold rose 4% to 1,222.3 tonnes in the third
quarter thanks to surge in recycling to its highest level since
2016, the WGC said.  
    GOLD DEMAND (T)*    
                         Q3 2019    Q3 2018    % change
 Jewellery                   460.9      546.2       -16%
 Technology                   82.2       85.4        -4%
 Investment                  408.6      194.4       110%
  - Bar and coin             150.3      298.2       -50%
  - ETFs and similar         258.2     -103.8           
 Central banks               156.2      253.1       -38%
 TOTAL                      1107.9       1079         3%
    * World Gold Council, Gold Demand Trends Q3 2019

 (Reporting by Peter Hobson; Editing by Emelia Sithole-Matarise)

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