Gold demand has reached a record high in the third quarter, driven by the precious metal’s price surge to all-time highs amid geopolitical unrest. According to the World Gold Council, total demand grew by 3% year-on-year to 1,313 tonnes in the July-September period. This is the highest level of demand by volume since the council began compiling records around 25 years ago.

The metal’s perceived safe-haven status has benefited from the Russia-Ukraine war and the Israel-Gaza conflict, creating an atmosphere of heightened uncertainty. Central banks’ surge in buying has coincided with gold’s price striking record after record this year. Although the metal’s price has fallen heavily since reaching an all-time peak of $4,381.52 an ounce in October, it has lent additional support to gold’s price in recent months, according to analysts.

Gold demand by value has surged 44% year-on-year to a record $146 billion in the third quarter. The US government shutdown and expectations of more cuts to Federal Reserve interest rates have also weighed on the dollar, supporting gold’s price. Exchange-Traded Funds (ETFs) have seen strong demand, allowing investment without trading on the gold futures market.

However, the high-price environment has dampened jewelry demand, which dropped 23% to 419.2 tonnes in the July-September period. This is the lowest third quarter since 2020, when the Covid pandemic took hold worldwide. Despite the recent retreat to around $4,000 an ounce, analysts view this as a healthy correction that helps to wash out short-term speculative positioning.

The World Gold Council’s data highlights the ongoing impact of geopolitical tensions on gold demand. As regional conflicts and trade tensions continue to create uncertainty, investors are turning to gold as a safe-haven asset. With ETFs providing an accessible investment option, gold demand is likely to remain strong in the coming months. The metal’s recent price correction may also attract new investors, potentially driving demand even higher.