Gold Supply and Demand : Q3 2007

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The ongoing financial crisis had a direct impact on the global gold market in the third quarter of 2007, as safe haven investors spurred record inflows into gold exchange traded funds helping to push total demand to a new record of $20.7bn, up 30% on a year earlier.

The ongoing financial crisis had a direct impact on the global gold market in the third quarter of 2007, as safe haven investors spurred record inflows into gold exchange traded funds helping to push total demand to a new record of $20.7bn, up 30% on a year earlier.

A change in demand patterns became evident during the quarter as investors rather than jewellery buyers became the dominant force, according to Gold Demand Trends, published on November 14 by the World Gold Council. At 138 tonnes, investment in ETFs and similar products were at a quarterly record, beating even Q4 2004 (113 tonnes) when the world’s largest gold ETF, streetTRACKS Gold Shares, was launched in New York.

The figures, compiled independently for WGC by GFMS Ltd, showed that jewellery demand was also strong through the quarter, but was heavily impacted in key markets in September as steep rises in price deterred buyers. Despite this, jewellery demand rose by 6% in tonnage terms over Q3 2007 and by 16% in dollar terms.

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