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Gold demand drops below 4,000 tons for the first time since 2009 - World Gold Council

Analytics

Consumer demand for gold in the world in 2020 fell below 4 thousand tons and was at the lowest level in the last 11 years, follows from the report of the World Gold Council (WGC).

Gold demand drops below 4,000 tons for the first time since 2009 - World Gold Council

Global demand for gold in the fourth quarter of 2020 fell 28% to 783.4 tons due to the COVID-19 pandemic, which negatively affected all sectors of demand, according to the World Gold Council (WGC).

The fourth quarter was the weakest quarter since the global financial crisis in the second quarter of 2008. The coronavirus pandemic, with its far-reaching implications, has been a driving force behind weak consumer demand throughout 2020, resulting in a 14% decline in annual demand to 3,759.6 tonnes, the first time less than 4,000 tonnes per year since 2009.

The demand for gold in the jewelry industry fell by 34% to 1411.6 tons at the end of the year. Jewelry demand in India amounted to 315.9 tons (-42%), and in China - 415.6 tons (-35%).

Investment demand for gold in the reporting period grew by 40% to 1,773.2 tons amid record inflows in ETFs and other exchange-traded products. In particular, demand for gold bars and coins rose 3% to 896.1 tonnes, while ETF inflows totaled 877.1 tonnes, versus 398.3 tonnes inflow a year earlier (up 120%).

The official sector (central banks) showed net purchases at the end of 2020, but demand decreased by 59% to 272.9 tons. While 2020 marked the 11th consecutive year of net central bank purchases, it was the lowest annual total central bank purchases since the trend began in 2010.

Demand in the technology sector showed a 7% decline to 301.9 tons. The impact of COVID-19 has seriously eroded the demand for gold used in the tech sector in 2020. The worst was in the first half of the year: in the third quarter there was an improvement over the previous quarter, and in the fourth quarter there was a recovery from the same period last year.

World supply at the end of the year decreased by 4%, to 4633.1 tons. Of the total, gold production decreased by 4% to 3400.1 tons, and recycling increased by 1% to 1297.4 tons. The global portfolio of hedging contracts declined by 65.1 tons for the year against an increase of 6.2 tons a year earlier.

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

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