The World Gold Council released a report citing an 11% drop in third quarter gold demand. A bulk of the slump in gold purchases is being attributed to slowing growth in China which has moderately depressed their jewelry and investment demand for the yellow metal. Even still, the World Gold Council released an earlier report anticipating that despite the growth concerns that have plagued the world’s second largest economy in 2012, China is expected to overtake India as the largest gold consumer this year. It remains to be seen if this expectation holds water in the face of China’s slumping third quarter gold demand. However, on another note, billionaire investor George Soros – who famously called gold the “ultimate gold bubble” – was cited increasing his positions in gold-backed exchange-traded products (ETPs) during the third quarter. Total ETP gold tonnage reached a record on Nov. 8 of 2,596.106 tons. Yesterday (11/14/12), that figure was about one ton shy of that record high at 2,595.39 tons. So while third quarter demand may have slid as a result of slowing Chinese growth, overall investment demand as evidenced by the ETP holdings is near record highs.
BusinessWeek.com By Maria Kolesnikova, Nov 15, 2012