In the third quarter of this year, global demand for gold bars and bullion coins reached 269 tons, representing a decline of 9% compared to the relatively strong third quarter of 2023. Meanwhile, the average gold price quoted by the LBMA hit another record during this period and, at USD 2,474 per ounce, was up 28% year-on-year. It is also worth noting that gold mine output is increasing around the world. According to the World Gold Council, the third quarter of this year saw another consecutive increase in demand for gold bars and coins in Central and Eastern Europe, although this represents a decrease in sales of almost 19% compared to the same period last year. During this period, Mennica Skarbowa sold 786 kg of investment gold compared to 675 kg in the equivalent period of the previous year, which is an increase of 16%. In the opinion of the company’s Management Board, higher sales of investment gold can still be expected in the next period of this year.
Global demand for gold bars and bullion coins reached a total of 859 tons for the first three quarters of 2024, similar to levels seen over the same period in the last four years. However, it reached a record in terms of value, which was as high as USD 63 billion. In the third quarter of this year, the average gold price quoted by the LBMA hit another record and, at USD 2,474 per ounce, increased year-on-year by 28%. Demand for gold bars and bullion coins totalled 269 tons during the period, representing a 9% decline from the relatively strong third quarter of 2023. Limited gold purchases in China, Turkey and Europe were the main factors contributing to the y/y slowdown. Germany, where demand for physical investment gold decreased by 70% y/y, experienced the largest decline during this period..
– In our part of Europe, investment gold sales in the third quarter of this year were 19% lower than in the same period last year. Although it must be acknowledged that demand for this bullion was higher than in Q2 this year. In total, our company has already sold more than 2 tons of gold this year compared to 1,945 kg from the same period last year, meaning an increase of 6.4%. We estimate that in the following months of this year, the war in Ukraine and the Middle East will continue to affect the growth of investment gold sales in Poland. Smaller weight bullion products such as 1-ounce bars or bullion coins continue to be the most popular among Poles. Such products are easy to sell around the world or exchange for other goods and coins are official means of payment – comments Adam Stroniawski, Managing Director of Sales at Mennica Skarbowa.
This year, Mennica Skarbowa generated cumulative sales of PLN 639.4 million, compared to PLN 539.7 million recorded in the comparable period last year. The company generated a net profit of PLN 9.8 million compared to PLN 1.6 million a year ago.
According to the data provided by the World Gold Council, it should be noted that, similarly to last quarter, Western investors continued to show strong interest in gold, but this was offset by increased selling interest when the price reached record levels, resulting in significantly lower net demand. Investment in bars and coins, while broadly stable quarter-on-quarter, was significantly weaker compared to Q3 2023. Declining sales in China, Turkey and Europe were the main factors contributing to the y/y slowdown, offsetting higher gold demand in India and several smaller markets in Asia.
– It is also worth noting that central banks around the world are still very keen to invest in gold. In total, they bought over 186 tons of this bullion in Q3 of this year, and again the biggest buyer was the National Bank of Poland, adding 42 tons to its gold reserves – adds Adam Stroniawski from Mennica Skarbowa.
According to the World Gold Council, central banks have already purchased 694 tons of gold products since the beginning of the year, below the recorded level of 2023, but in line with the same period last year. However, when analyzing the last four quarters, net purchases of 909 tons of gold remain well above average levels over the longer term. It is worth noting that total gold sales (including gold bars, coins, jewelry, industrial products, as well as ETFs) in the third quarter of 2024 increased by 5% year-on-year to a record level of 1,313 tons. However, recycled gold volumes from the secondary market increased by 11% year-on-year.