High gold demand capped by ETF sell-off in 3rd qtr -GFMS
By Renita D. Young
NEW YORK, Nov 9 (Reuters) - Weaker gold prices boostedinvestment demand during the third quarter, but gains werecapped by a sell-off in gold-backed exchange-traded funds(ETFs), the GFMS metals consultancy at Refinitiv said on Friday.
The price of gold dropped nearly 5 percent in the thirdquarter as investors continued to favor the U.S. dollar andriskier assets during a global trade war. "Sentiment in the investment sector remained largelygold-averse over the third quarter and it is arguable that theprice performance, not only in U.S. dollar terms, but in othermajor currencies as well, became largely self-fulfilling," GFMSsaid in a statement.
Holdings of gold-backed ETFs declined nearly 4 percent to2,221 tonnes at the end of the third quarter from 2,312 tonnesin the prior quarter. Net outflows at the end of the thirdquarter totaled $3.5 billion.
Global physical demand rose nearly 8 percent to 1,010tonnes, the highest on a quarterly basis since the fourthquarter of 2017.
Global retail investment, including coin and bar demand, wasmixed. Coin demand increased nearly 20 percent to 73 tonnes fromthe second to third quarter and rose 16 percent year over year.Bar prices edged down to 175 tonnes in the third quarter from176 tonnes in the second quarter, GFMS data showed.
Jewelry consumption declined 2 percent from 474 tonnes inthe second quarter to 466 tonnes in the third quarter.
Supply totaled 1,118 tonnes in the third quarter, up morethan 3 percent from the prior quarter.
Trade tensions and European Union bartering supported goldabove $1,180, GFMS said, and "this is leading short-side tradersto lock in profits."
It estimated gold prices to average $1,224 per ounce in thefourth quarter and $1,285 for 2018.
(Reporting by Renita D. Young; Editing by Richard Chang)
twitter.com/renitadyoung)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |