London: Soaring gold prices have pushed out some of the biggest buyers.

Jewellry demand plunged 21% in the third quarter, taking the year-to-date total to the lowest level since 2009, according to a report from the World Gold Council. Central banks bought almost half as much gold as a year earlier.

“The jewellry market is a price taker, and given how much prices have increased, many chose to sit on the sidelines," said Alistair Hewitt, head of market intelligence at the London-based group, which lobbies on behalf of mining companies.

Central banks reacted similarly. “When they see rapid movements in price, they want to wait and see what that means in terms of their reserves," he said

Gold topped $1,375 a ounce in July as investors speculated that the Federal Reserve is moving closer to raising interest rates and the upcoming US presidential election may introduce geopolitical uncertainty. Investors bought gold through exchange-traded funds in the third quarter, a change from sales a year earlier.

Total gold demand dropped 10% to 992.8 metric tonnes in the third quarter, falling below 1,000 tonnes for the first time since mid-2015, according to the council.

Consumer demand, particularly in China, may have been hurt by shifting tastes for spending on experiences, such as travel, rather than physical items like gold, the council said. Buyers are also increasingly interested in designer jewellry with a lower gold content.

Purchases may be starting to rebound in the final quarter of the year, Hewitt said, with research showing more demand in India and China. The council also cited a survey showing more central banks are considering increasing holdings of gold over the next three years.

Higher prices made more metal available for recycling. Scrap supply rose 30% to 340.9 tonnes in the quarter, council data showed. Mine production fell 1% to 846.8 tonnes, the result of declining investment when prices were low. Bloomberg