The latest data from the World Gold Council (WGC) showed that central banks increased their gold purchases to 337 tonnes during the third quarter of the year, mainly due to higher purchases from China (+78 tonnes), Poland (+57 tonnes) , Turkey (+ 39t) and India (+9t). Overall, purchases by central banks reached 800 tonnes during the first three quarters of the year, a record amount purchased for a total of nine months, as geopolitical concerns pushed central banks to increase allocation towards assets. of security. Meanwhile, demand for gold from other sectors was weak. Demand for bars and coins fell 14% year-on-year to 296 tonnes, while gold ETFs recorded net outflows of 139.3 tonnes during the third quarter of the year. Global jewelry consumption fell 2% year-on-year to 516.2 tons in the third quarter.
Global gold demand (excluding OTC) fell 6% year-on-year to 1,147 t in the third quarter of this year, while pent-up demand (excluding OTC and equity flows) also declined 3.2% year-on-year in 3,285.7 t in the first nine months of the year due to the slowdown. demand for jewelry, lower consumption in the technology sector and mixed performance of the investment sector. However, pent-up demand (including stock and OTC flows) increased 4.7% year-on-year to 3,692.4t in January-September 2023. In terms of supply, the council reported reasonable growth in both mining production ( +2% year-on-year) and recycling (+8%). year-on-year), resulting in higher gold supply that increased 6% year-on-year to 1,267 tons in the third quarter of the year.
Aluminum smelters in southern China’s Yunnan province are planning to reduce production again this winter season as hydropower supply dwindles in the dry season, according to the Shanghai Metals Market (SMM). The group further added that production cuts at four smelters will range between 9% and 40% and are expected to begin in the coming days. The total capacity reduction is estimated at around 1.15 million tonnes. Currently, the total operational capacity was around 5.65 million tonnes as of the end of September. Last year, Yunnan province suffered two rounds of aluminum production cuts due to a shortage of hydropower.
Finally, the latest LME COTR report released yesterday shows that investors reduced net bullish positions for copper by 2,783 lots for the fourth consecutive week to 30,306 lots in the week ending October 27, as a result of the recent rally. of the foreign exchange inventories available in the LME warehouses. eased concerns about supply shortages. A similar move has been seen in zinc, with speculators reducing net bullish bets by 1,348 lots for the fourth consecutive week to 30,538 lots during the last reporting week. In contrast, money managers increased net bullish bets on aluminum by 3,014 lots for the second consecutive week, up to 107,510 lots during the mentioned period.