(Kitco News) - Investment demand was the driving force behind gold’s unprecedented rally in the third quarter, which saw prices rally to a record high of over $4,360 an ounce.
While investors piled into gold-backed exchange-traded funds at a record pace, they also had an appetite for the physical precious metal. This week, the British Royal Mint reported total bullion coin sales revenue up 102% compared to the same quarter last year and 6% higher than the previous quarter.
The British Mint doesn’t provide specific sales figures. However, it said that gold coin sales revenue rose 5% quarter-on-quarter, maintaining robust levels established earlier in the year. Meanwhile, silver demand saw extraordinary demand, with coin sales surging 44% compared to the previous quarter and 83% from last year.
The mint also saw solid growth in its digital precious metals products. Royal Mint's VAT-free DigiGold range achieved record investment, with total inflows up 156% compared to the same quarter last year.
“Both silver and platinum also reached all-time investment highs as investors strategically rotated away from gold following its earlier rally. Both metals continued their ascent beyond the end of the quarter,” the mint said.
Stuart O'Reilly, Market Insights Manager at The Royal Mint, said that geopolitical and economic uncertainty are driving new and seasoned investors into hard assets.
“These are investors who already understand the strategic role of precious metals in a portfolio and are already aware of the Capital Gains Tax exemption that UK bullion coins convey – they’re choosing now as the time to increase their allocations,” he said. “In October, we saw a 70% increase in purchasers with customers spending on average twice as much as they did in October last year.”
Robust demand in the U.K. highlights an interesting regional dichotomy in the marketplace. According to data from the World Gold Council, U.S. gold bar and coin demand was the only region to see a year-over-year decline in the third quarter. The WGC said, demand sank to 7t – the lowest since the pre-covid 2017-19 trough.
