GOLD BUYING prices in London's wholesale wedding jewelry china held unchanged Thursday, trading around $1163 per ounce as new data put world demand at 5-year lows during the thirdworld stock markets ticked higher.
Silver also held flat, despite a fresh drop in other commodity prices, capping the relative ratio of gold to silver prices below 74.5 – a 5-year high when first reached last week.
Brent crude oil today broke below $80 per barrel for the first time since 2010, and US natural gas fell 2.5%.
New data from market-development organization the World Gold Council meantime said that, while world gold demand slipped from the July-Sept. period last year, India overtook China in the third quarter to regain its No.1 spot in world buying.
Gold buying by investors in the developed West fell again however, the Gold Demand Trends report said, falling 30% by value in Europe and 41% by value in the United States over the last 12 months.
As investors sold, Wednesday's close saw the SPDR Gold Trust (NYSEArca:GLD) – the world's largest exchange-traded trust fund at its 2011 peak by value – again cut the amount of gold needed to back its shares.
Down 2.5% so far this month, the GLD's gold bullion holdings have now shrunk to 722 tonnes – down 10% from New Year and down 47% by weight from the end-2012 peak to reach the smallest level since the Lehman's crisis of September 2008.
"You've seen some investors come out of gold," said Marcus Grubb, director of investment research at the mining-backed World Gold Council to CNBC today, pointing to those investors "who did buy gold as a credit hedge, a hedge against the potential failure of the financial system" during the 2007-2012 crisis.
"What you're seeing now," said Grubb, "is the market returning to fundamentals, with consumer buying driving the price in the longer run – and that still looks very positive, especially in India and China."
Although dropping 37% overall in Q3 on the WGC's data from the record surge of a year earlier, China's gold jewelry buying was "on a par" it says with the third quarters of both 2011 and 2012.
Indian gold demand, in contrast, has shown a rising trend since the slump of mid-2013, forced by the government's strict anti-import rules.
With the 2014 peak in Hindu festival season demand approaching in late September, India's rise in jewelry purchases was "magnified" says the report because "consumers had [earlier] deferred their gold buying while they waited for the [Rupee] price to settle at lower levels."
Global gold mining supply meantime rose "marginally", but so-called "scrap" flows of recycled gold from existing holders fell 25% from Q3 of 2013 as lower prices, and improving economic growth, deterred new sellers.
Year-to-date, global scrap gold supplies are at the lowest level since before the financial crisis, the WGC data show.
"With both Diwali and peak Indian wedding season having passed," says today's note from South African Standard Bank's commodity division – now majority owned by China's giant ICBC – "demand is coming off the boil in India at least.
"Asian demand generally is still fairly solid however and showing signs of picking up."
New data today showed China's industrial output slowing last month towards this year's decade lows, growing 7.7% from October 2013.
Retail sales in the world's second-largest economy also grew less quickly than analysts forecast last month, which included the peak Golden Week holiday shopping spree.
Expanding 11.5% in Yuan terms year-on-year, retail sales grew at the slowest pace since early 2006 – again sparking speculation from analysts that China's slower rate of growth will "encourage further monetary easing" by the People's Bank.
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