Gold tracks lower in subdued, pre-Fed meeting trading
World Gold presents overall solid demand picture for gold in third quarter

(USAGOLD – 10/29/2021) – Gold tracked lower in subdued trading ahead of next week’s Fed meeting as the dollar and bond yields firmed. It is down $11 at $1789.50 and still struggling to breach the $1800 mark. Silver is down 16¢ at $23.97 and struggling to remain above the $24 level. As we close out October, gold is up 3.1% on the month while silver is up 6.3%.

The World Gold Council is out this morning with its Gold Demand Trends report for the third quarter. Among a wealth of statistics, it shows significant overall global growth in bar and coin demand featuring record year-to-date growth in the United States (+31%) and Germany. ETF demand lagged the rest of the market, but, the Council points out, the weak showing needs to be considered in “the context of recent history.” ETFs added more than 1200 tonnes to their holdings in 2019 and 2020 while reporting only a minor reduction in aggregate stockpiles in 2021. In short, the operative mindset in the global gold market is “buy and hold.”

bar chart showing coin and bar demand for third quarter 2021
Chart of the Day courtesy of the World Gold Council • • • Click to enlarge

“Bar and coin demand,” says WGC, “should continue to be supported by the macro environment of high inflation prints and economic concerns. One surprising area of strength is the US, where the year-to-date total is the highest in our dataset. This was all the more notable given the weakness in both gold ETFs and COMEX futures. … Although the pace of investment slowed from the first half of the year, investment remains very elevated when compared with historical norms: the five-year quarterly average is 13 tonnes. Year-to-date investment reached a record of 91 tonnes. Q4 has apparently started well, potentially putting the full-year record from 2009 (114 tonnes) within reach.”

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