According to the latest customs data, Switzerland, the world’s largest hub for gold refining and transit, saw its gold exports drop to their lowest level in 15 months in September. The main reason for the decline was lower demand from India and Turkey, two of the biggest precious metal consumers in Asia and the Middle East.
The data showed that Switzerland exported 112.9 tonnes of gold in September, down from 147.7 tonnes in August and the lowest since June 2022. India, which usually sees a surge in gold buying during the festive and wedding season in the second half of the year, received only 52.7 tonnes of Swiss gold, the lowest since January. With high inflation and currency depreciation, Turkey imported only 1.5 tonnes of gold from Switzerland, the lowest in 12 months.
The slump in gold demand from these countries reflects the impact of high prices and economic uncertainty on consumer sentiment. Gold prices have traded near 2-1/2 month highs amid geopolitical tensions and inflation fears, making the metal less affordable for price-sensitive buyers. Gold prices averaged $1,762 per ounce in September, up from $1,730 in August.
Other major destinations for Swiss gold also saw lower shipments in September. China, the world’s top gold consumer, received 16.4 tonnes of gold from Switzerland, down from 18.8 tonnes in August. Hong Kong imported 5.1 tonnes of gold, down from 6.3 tonnes. The United Arab Emirates, a regional hub for gold trade, imported 9.8 tonnes of gold, down from 11.9 tonnes.
The only exception was the United States, which increased its gold imports from Switzerland to 8.1 tonnes in September, up from 4.9 tonnes in August. This could be due to higher investment demand for gold as a safe haven asset amid rising market volatility and uncertainty.
The Swiss customs data provides valuable insight into the global flows and trends of the gold market, as Switzerland refines about 70% of the world’s gold and exports it to various countries for jewelry, investment, and industrial use.
According to the World Gold Council, global gold demand fell by 4% year-on-year in the first half of 2023 as higher prices and other disruptions weighed on consumer demand. However, the council expects gold demand to improve in the year’s second half, supported by seasonal factors, central bank buying, and portfolio diversification.
Source: Mining Weekly
