Q3 2013 global gold demand hit its lowest level in the last four years, marking what several analysts consider solid proof of the end of gold’s decade-long bull run.
According to data published by the World Gold Council November 14, the precious metal’s demand was 869 tonnes between July and September, 21% less than the same period last year. The industry lobby group said outflows from physical bullion funds and a drop in buying from major consumer India offset firmer jewelry, coin and bar sales.
The document was not all doom and gloom, as it also predicts that the demand slide is likely to slow in the fourth quarter.
WGC’s managing director for investment Marcus Grubb acknowledged that the sentiment in the market has shifted. “Technically the bull run is over because we are going to have a down year for the first time in 13 years,” he said in a press release.
Gold prices have jumped every year since 2001, but at current prices of $1,271 an ounce the precious metal is down 24% since January this year.
While Grubb said the council expects selling of gold-backed exchange-traded funds to ease soon, he warned gold demand is still likely to fall for a second consecutive year as demand from India and China—the two main consumers of the precious metal—is falling.
Besides that, the fact that the Indian government has imposed several restrictions on gold imports is weighing heavily on the country’s demand, which fell 32% over the quarter to just 148 tonnes, the lowest since early 2009.
Grubb said those import restrictions may be eased next year following elections in India, likely improving global demand.
Reprinted by permission of MINING.com