Global investment demand for gold jumped 44% in the third quarter from a year earlier with the U.K.’s exit from out of the European Union and the U.S. presidential election among the key reasons why investors sought refuge in the precious metal, according to a report Tuesday from the World Gold Council.
Overall world-wide demand for gold, however, fell by 10% to 992.8 metric tons in the third quarter from a year earlier as the rise in prices for the metal kept buyers of the physical metal at bay.
Investment demand climbed to 335.7 metric tons, with exchange-traded products accounting for 146 metric tons of that increase. That marked a third quarter in a row of inflows into ETPs, the WGC said.
“Institutional investors have looked to hedge against uncertainty stemming from geopolitical risk, including Brexit, the U.S. presidential race and the potential impact of elections in France and Germany next year,” said Alistair Hewitt, head of market intelligence at the WGC, in a statement. Negative interest rates also “continued to underpin institutional demand.”
The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust has lost about 0.7% in the third quarter, but it still traders close to 20% higher year to date.
But ETPs were the “only area of growth” for world-wide gold demand, said the WGC.
Demand for gold coins and bars dropped by 36% to 190.1 metric tons. Year-to-date demand for these physical forms of gold stood at 664.2 metric tons, the lowest since 2009.
