Thailand tops demand for gold in ASEAN for 2nd successive quarter
Growth in consumer gold demand was the highest in Thailand among ASEAN countries for the second consecutive quarter, with an 11% year-on-year (YoY) increase.
Demand amounted to 14.5 tonnes in the third quarter of 2024, according to the World Gold Council’s “Q3 2024 Gold Demand Trends” report released on Thursday.
This growth is mirrored on a global scale, where total gold demand rose by 5% YoY to 1,313 tonnes, marking a record third quarter, with total demand exceeding US$100 billion for the first time, largely due to robust investment amid high prices.
Global investment demand more than doubled YoY to 364 tonnes, largely driven by an increased appetite for gold exchange-traded funds (ETFs) from Western investors. Notably, gold ETFs saw a net addition of 95 tonnes, representing the first positive quarter since Q1 2022.
While global demand for bars and coins fell by 9%, Thailand's demand increased by 15% YoY, reaching 12.1 tonnes in Q3, making it the second highest in the region. The year-to-date total for global bar and coin demand remains strong at 859 tonnes, compared to a 10-year average of 774 tonnes.
Shaokai Fan, head of Asia-Pacific (ex-China) and global head of central banks at the World Gold Council, explained that consumer demand in Thailand was resilient, partly fuelled by the long-awaited announcement of the digital wallet programme, which includes cash payments aimed at boosting the local economy.
"The government initiated this programme at the end of Q3, potentially supporting demand in Q4," he noted.
Investor appetite for gold in ASEAN was bolstered by global geopolitical tensions and local political and economic concerns, with Thailand, Indonesia, and Malaysia all experiencing double-digit YoY growth.
In Thailand, consumer demand maintained its position as the highest in the region for two successive quarters.
While central bank buying slowed in Q3, demand remained robust at 186 tonnes. Year-to-date central bank demand matched that of the same period in 2022, reaching 694 tonnes.
Gold prices soared to record highs during the quarter, averaging US$2,474 per ounce, which tempered global demand for gold jewellery.
Jewellery consumption declined by 12% YoY in volume but increased by 13% in value, suggesting that consumers are willing to spend more despite purchasing lower quantities.
Further supporting demand, total gold usage in technology grew by 7% YoY, driven by growth in the electronics sector, particularly as the AI boom continues.
Total gold supply rose by 5% YoY, with mine production increasing by 6% and recycling up by 11%.
Louise Street, senior markets analyst at the World Gold Council, commented on the global market trends.
She explained that this year's third quarter saw increased investment and over-the-counter activity propelling global gold demand and driving price performance.
Although higher gold prices dampened demand in most consumer markets, India's import duty cut helped maintain remarkably high jewellery and bar demand in this record-breaking price environment.
"The ‘FOMO factor’ among investors has been a significant driver of increased demand this quarter. Many investors are keen to capitalise on price momentum, encouraged by potential interest rate decreases and considering gold's role as a safe haven amidst US political uncertainty and escalating Middle Eastern conflicts," she added,
Looking ahead, she noted that the strong momentum in gold investment was likely to continue, supporting both demand and price levels. However, with over 30 record price highs in 2024, this environment presents challenges for consumer demand. Nonetheless, the prospect of economic growth is a key factor to monitor, as it could influence market dynamics.
