1 November, 2022

Bar and coin investment jumped, while gold ETFs saw a second consecutive quarter of outflows

  • Global gold-backed ETFs saw outflows of 227t in Q3 – the largest since Q2 2013 – as investors focused on rising rates and a stronger US dollar 
  • Over the year to end-September, flows in the gold ETF space were virtually flat, having almost fully reversed the January-April inflows 
  • The bar and coin sector had its strongest Q3 since 2011, with a very healthy 351t of demand.
Tonnes Q3'21 Q3'22   YoY % change
Investment 232.8 123.8 -47
Bar & coin 258.9 351.1 36
  India 42.9 45.4 6
  China, P.R.:Mainland 64.7 70.1 8
Gold-backed ETFs -26.0 -227.3 - -

Source: Metals Focus, World Gold Council

The investment environment for gold in Q3 was dominated by widespread, multi-decade high inflation and the resultant impact on interest rates. Bar and coin investors focused on the former and sought the safety of gold as a hedge against inflation. Gold ETF investors, in contrast, reduced their holdings as they focused on gold’s rising opportunity cost in the face of hefty rate hikes from central banks globally and a surge in the US dollar. Along with ETF outflows, OTC investment softened and managed money futures positioning on Comex moved temporarily to net short for the first time in three years.


Global gold ETFs saw outflows of 227t (US$12bn) during Q3, bringing collective ETF gold holdings to 3,548t (US$191bn) by the end of September. 

Five straight months of outflows have almost fully reversed the 316t January-April inflows: over the year to end-September, global inflows into gold ETFs amounted to just 7t. Y-t-d performances have differed markedly across regions, however: European-listed funds saw 41t of net inflows, while those listed in the US and Asia generated net outflows of 21t and 15t respectively. The relatively robust picture in Europe is likely related to proximity to the Russia-Ukraine war and its knock-on economic impact, as well as the stronger performance of gold in euro terms.

The opening weeks of Q4 show continued outflows, a significant portion of which are from funds listed in the the UK, where markets remain unsettled by the volatile political and economic scenario.

Funds listed in North America generated the bulk of global outflows (-149t). This is in part a reflection of the size of the market and outflows were concentrated among the larger, more liquid funds. Sentiment was overshadowed by increasingly hawkish Fed monetary policy: investors adjusted their rate expectations sharply higher and, as the US dollar rallied, gold ETF positions were curtailed accordingly. The Q3 activity took North American-listed funds to a small net outflow (-21t) y-t-d. 

Funds listed in Europe lost 78t during Q3. Investors in the region were similarly driven by the outlook for interest rates, with central banks – including the ECB, SNB and Bank of England – all hiking during the quarter. The bulk of the region’s outflows (55t) came from UK-listed funds, with Germany, Switzerland and France contributing the remainder.  

Asian-listed funds saw marginal inflows (1t). Regional flows are heavily influenced by China, which saw a 1t net inflow during Q3. This was entirely due to inflows in July, when investors added to their holdings on a local gold price pullback. Indian gold ETFs saw equally marginal net outflows in Q3 (<1t) as investors were attracted by the stronger returns generated by local equities and bonds.

Funds in other regions barely changed over the quarter, with outflows of less than 1t. Australia and South Africa dominate the flows as the two largest markets in this category. Australian-listed funds lost 0.4t (around 1% of holdings), which was partially offset by marginal inflows into South African funds. 

Bar and coin

Retail investment demand for gold bars and coins jumped to a six-quarter high of 351t, up 36% y-o-y and 41% higher q-o-q. Surging global inflation levels fuelled demand across most markets, with further impetus generated by price pullbacks during the quarter. 


Turkey and Europe spearhead sharp y-o-y growth in bar and coin investment

GDT Q3 2022: Investment Chart 1

Sources: Metals Focus, World Gold Council; Disclaimer

*Data to 30 September 2022.


Bar and coin demand in China almost doubled to 70t from the previous quarter’s COVID lockdown-induced slump. On a y-o-y basis, demand grew by a more moderate 8%. A sharp dip in the local gold price in July prompted bargain-hunting, which was boosted by the release of pent-up demand following strict lockdowns in key cities during much of Q2. Furthermore, commercial banks’ promotional activities around physical gold products attracted some investors.  

Gold’s safe-haven appeal came to the fore during the quarter as the local currency depreciated, magnifying the gold price rebound, and local equity markets fell. By the end of September, the local gold price was 4% higher y-t-d.

Looking ahead, the combination of gold’s safe-haven qualities and commercial banks’ continued promotional efforts should support bar and coin demand. But there is potential for renewed mobility restrictions due to China’s strict zero-COVID policy, which could threaten demand. 


In Q3, Indian bar and coin demand saw a 6% y-o-y improvement as retail investors responded to lower local gold prices and weaker equity markets. At 45t, demand was 14% above the five-year quarterly average and took y-t-d demand to 117t, the highest Q1-Q3 total since 2015. 

Imports were disrupted during Q3. An increase in gold’s custom duty on 1st July encouraged smuggling activity in order to avoid paying the higher rate of tax. But gold imports were subsequently boosted by traders who exploited a loophole that allowed gold to be imported as a platinum alloy at a lower custom duty. This loophole was closed at the beginning of October, but not before an estimated 29-30t of gold was imported via this route during August and September. 

Coin demand picked up during the festive period of Navratri and the fourth quarter has, according to discussions with the trade, started on a strong note with the arrival of Diwali and the wedding season. That said, demand as we head into year-end is unlikely to match last year’s fourth quarter total of 79t, which was the highest quarterly investment for nine years.

Middle East and Turkey

The Middle East generated the highest level of quarterly retail investment for four years, up 64% y-o-y to 26t. In line with the broad global themes, rising inflation and the opportunity to buy on a dip in the price were major factors driving investment during the quarter. Safe haven demand was particularly in evidence in Iran, and a q-o-q doubling of investment combined with tight supplies of official gold coins to drive up premiums. 

Retail investment in Turkey was exceptionally strong in Q3, increasing more than fivefold. At 47t, it was the second highest quarter in our data series. Record inflation combined with stable lira prices brought about a surge in demand, and this gained pace on price pullbacks during the quarter.

The West

In Western markets, surging inflation, slowing economic growth and persistent geopolitical concerns continued to support demand for gold bars and coins.

Bar and coin investment demand in the US remained elevated – up 3% y-o-y at 25t. Although demand was slightly softer compared with the previous quarter, it remained well above the 15t quarterly average over the last five years. 

US mint coin sales y-t-d are the highest since 1999. As consumers express increasing pessimism about the state of the US economy amid increasing inflation, investment demand has been supported by gold’s role as an inflation hedge. This is reflected in a consumer survey we ran in September in which 82% of US gold investors agreed that gold offers protection against inflation and/or currency fluctuations and 85% agreed that it is a good safeguard against periods of political/economic uncertainty.1 

And the prospects for the remainder of the year suggest demand will remain healthy. Our survey saw almost 50% of US retail investors say they were ‘very likely’ to buy gold bars or coins in the next 12 months.



US retail investors see gold as a safe-haven and source of protection

GDT Q3 2022: Investment Chart 2

Sources: Appinio, World Gold Council; Disclaimer

Note: % of respondents who have invested in gold at some point in the past (base: 1,095) who selected either ‘Completely agree’ or ‘Somewhat agree’ as a response to each statement.

European retail gold investment was 28% higher y-o-y at 72t. Slowing growth across much of the region, war on the doorstep and monetary authorities managing a delicate balance between hiking rates enough to curb inflation without tipping the region into sharp recession, has encouraged continued flows into gold. Demand in Germany gained 25% y-o-y, to reach a y-t-d record of 131t. 

Demand in the UK was comparatively underwhelming, unchanged y-o-y at 4t. Nevertheless, bar and coin buying remains historically elevated, 25% above its five year quarterly average. A relatively weak pound meant that sterling gold prices held up during August and September, and the lack of an attractive entry point for investors, along with the sharp spike in the gold price towards the end of September likely encouraged some profit taking. Nevertheless, there are reports of UK investors piling into gold at the beginning of the fourth quarter in reaction to the market turbulence generated by the mini-budget, which may result in a strong finish to the year.

ASEAN markets

Investment demand across Southeast Asian markets was robust on the back of concerns about inflation, local currency depreciations against the US dollar and the sustainability of medium-term economic growth. Vietnam saw a particularly significant y-o-y rise in investment demand. It more than trebled to 8t as local investors again sought refuge in gold, with high demand for chi rings and SJC tael bars. Due to lack of supply and high demand, premiums remain elevated at around US$625/oz. Retail investment in Thailand and Indonesia increased y-o-y, by 42% and 20% respectively, while the smaller gold markets of Malaysia and Singapore also saw sizable increases, albeit negligible in absolute terms.

Rest of Asia

The Japanese market returned to net investment of 3t in Q3, up 56% y-o-y. Absolute price levels remain historically high which slowed selling, particularly among the older generation who have been holding gold for a long time. 

Investment demand in South Korea was down 19% y-o-y in Q3, to 4t. Even though the dollar price fell by around 8% during the quarter, the sharp depreciation of the Korean won meant that local prices rose by around 4%. This led to cautious sentiment in the market, with investors waiting for a better entry point.


Investor appetite for gold remains strong due to concerns about global economic malaise, high inflation and the spectre of rising interest rates in an over-leveraged market. While retail investment demand remained lower than its impressive Q1 levels, it was robust at 5t – a marginal 1% y-o-y increase.


  1. An online survey of 2,000 US retail investors aged 18-75. Fieldwork took place in September.

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