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Gold demand falls to 11-year low in Q3 2020 - WGC

Business and Finance

COVID-19 has negatively impacted the entire technology supply chain, leading to an overall drop in gold demand.

Gold demand falls to 11-year low in Q3 2020 - WGC

Global demand for gold in the third quarter of 2020 fell 19% to 892.3 tons due to the COVID-19 pandemic, which negatively affected all sectors of demand, according to the World Gold Council (WGC).

Quarterly numbers were the lowest since Q3 2009 as consumers and investors continued to grapple with the effects of the global pandemic.

The demand for gold in the jewelry industry fell by 29% to 333 tons, the most active buyers of precious metals for jewelry purposes are India and China. Jewelry demand in India amounted to 52.8 tons (-48%), and in China - 119.1 tons (-25%). The demand for gold in the Russian Federation in July-September fell by 5% to 11.2 tons.

Investment demand for gold in the reporting period increased by 21% to 494.6 tons amid strong demand for coins and bars and an increase in inflows to ETFs and other exchange-traded products. In particular, demand for gold bars and coins soared 49% to 222.1 tonnes, while ETF inflows totaled 272.5 tonnes, versus 258.7 tonnes inflow a year earlier (up 5%).

The formal sector (central banks) showed net sales for the quarter, for the first time since the fourth quarter of 2010. Sales amounted to 12.1 tons against purchases of 141.9 tons a year earlier.

The demand of the technology sector showed a decrease in the third quarter by 6% to 76.7 tons. COVID-19 has negatively impacted the entire technology supply chain, leading to an overall drop in gold demand in the sector.

The global gold supply by the end of the quarter decreased by 3%, to - 1223.6 tons. Of the total volume, primary gold production decreased by 3% to 883.8 tons, secondary processing - increased by 6% to 376.1 tons. The global portfolio of hedging contracts declined another 36.2 tons in July-September against a 4.2 tons decline a year earlier.

The World Gold Council was created in 1967 by the world's largest gold producers. The main task of the organization is to stimulate the demand for gold. The headquarters of the council is located in London.

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