Gold rallied on Friday (Nov. 22) on safe-haven demand and was on track for its biggest weekly gain in over a year, propelled by the intensifying Russia-Ukraine crisis.
Earlier this week, Ukraine launched its second Western-supplied missile into Russia, while Kyiv’s air force reported that Russia fired its first intercontinental ballistic missile at Ukraine on Thursday (Nov. 21) in retaliation.
Spot gold was up 1% at $2,696.77 per ounce, having earlier hit its highest since Nov. 8 at $2709.99. U.S. gold futures rose 0.9% to $2,698.90, according to Reuters.
The safe-haven precious metal tends to shine during periods of increased geopolitical tension, economic risks, and in a low interest rate environment.
Earlier, a World Gold Council’s report revealed that total gold demand increased 5% year-on-year to 1,313t, a record third quarter. Total demand exceeded US$100bn for the first time on record, supported by strong investment in a record-high price environment.
Global investment demand more than doubled year-on-year to 364t, driven by a shift in demand for gold ETFs primarily from Western investors. Globally, gold ETFs added 95t, marking the first positive quarter since Q1’22. Bar and coin demand fell 9%, but the year-to-date total remains strong at 859t compared to the 10-year average of 774t.
Central bank buying slowed in Q3 though demand remained robust at 186t. Year-to-date central bank demand reached 694t, in line with the same period of 2022.
Gold prices continued to rise to record highs during the quarter reaching an average of US$2,474/oz, hampering global demand for gold jewellery. Total jewellery consumption was down 12% year-on-year on a volume basis, but up 13% in value terms suggesting that consumers are comfortable spending more on lower quantities of gold products.
In addition, total demand for gold in technology grew 7% year-on-year, bolstered by growth from the electronics sector as the AI boom continues to support demand for the yellow metal.
Total gold supply increased 5% year-on-year, with a jump of 6% in mine production and an 11% rise in recycling.
