Gold: Prices Dragged by Lower Demand

The World Gold Council reported that Q3 gold demand dropped to the lowest level since Q3 2009...

Gold 3

On Friday, spot gold ended 0.6% higher to $1,879, though still marking a third straight month of decline, as the U.S. dollar began to gain strength. Over the weekend, the World Gold Council reported that Q3 gold demand dropped 19% on year to 892 tons, the lowest level since Q3 2009. Demand was 10% lower at 2,972 tons in the first nine months of the year, compared with the prior-year period.

Gold demand in China was mixed. The report highlighted that Q3 jewellery demand slid 29% on year to 333 tons, where China and India accounted for the largest volume declines, citing the COVID-19 effects. By contrast, bar and coin investment jumped 49% on year to 222 tons, as most major retail investment markets saw strong growth though the largest volume increases were seen in Western markets, China and Turkey.

From a technical point of view, spot gold stays on the downside as shown on the daily chart. It remains capped by a declining trend line drawn from August, with a shorter-term bullish trend line broken. The level at $1,925 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $1,849 and $1,815 respectively.


Source: Gain Capital, TradingView

More from Gold

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.