Total demand grew 3% year-on-year in the July-September period to 1,313 tonnes, the World Gold Council (WGC) said, as the metal perceived as a safe-haven investment benefitted from the Russia-Ukraine war and the Israel-Gaza conflict.

That was the highest level of demand by volume since the WGC began compiling such records around 25 years ago.

“Various regional conflicts, the increasing rhetoric around trade conflicts, all of that combines really to just create this atmosphere of heightened uncertainty and boost demand for gold,” WGC analyst Louise Street told AFP.

A surge in buying, driven by central banks, coincided with gold’s price striking record after record this year.

However, since the metal struck an all-time peak in October of US$4,381.52 an ounce, it has fallen heavily on profit taking.

“Gold demand by value surged 44% year-on-year to a record US$146 billion in Q3,” the WGC added in its report.

The US government shutdown and expectations of more cuts to Federal Reserve interest rates, which is weighing on the dollar, have lent additional support to gold’s price in recent months according to analysts.

There has been strong demand for gold via Exchange-Traded Funds (ETF) on stock markets. ETFs allow investment without trading on the gold futures market.

The high-price environment has, however, dampened jewellery demand, according to the WGC.

It dropped 23% to 419.2 tonnes in the July-September period, the lowest Q3 since 2020 when the Covid pandemic took hold around the world.

Street called gold’s recent retreat to around US$4,000 an ounce “a healthy correction… that helps to wash out some of that more frothy, perhaps short-term speculative positioning”.