Global gold demand hit an 11-year low in 2020 at 3,759.6 tonnes, primarily as a consequence of a weak October-December quarter and the COVID-19 associated disruptions internationally driving a muted client sentiment all year long, the World Gold Council (WGC) mentioned in a report.
The general client demand throughout 2019 was at 4,386.4 tonnes, whereas in 2009 the general demand was at 3,385.8 tonnes, in accordance with the WGC’s 2020 Gold Demand Trends report.
Global gold demand dropped by 28 per cent year-on-year (YoY) to 783.4 tonnes within the fourth quarter in comparison with 1,082.9 tonnes in the course of the October-December interval of 2019, the report acknowledged.
The report additional revealed that the worldwide gold jewelry demand fell by 34 per cent to 1,411.6 tonnes in 2020, from 2,122.7 tonnes in 2019.
Gold jewelry demand within the fourth quarter of 2020 dipped by 13 per cent to 515.9 tonnes in comparison with 590.1 tonnes, leading to a full-year whole of 1,411.6 tonnes, which was 34 per cent decrease than in 2019 at 2,122.7 tonnes.
While jewelry demand improved steadily from the severely depleted second quarter, the coronavirus pandemic continued to influence client behaviour, it famous.
“The influence of the COVID-19 pandemic was felt throughout the gold market all through 2020, and the fourth quarter was no totally different. Consumers all over the world remained on the mercy of lockdowns, financial weak spot, and excessive gold costs, leading to a brand new annual low in jewelry demand,” WGC Senior Markets Analyst, Research, Louise Street acknowledged.
On the opposite hand, elevated uncertainty and coverage response to the pandemic supported annual funding demand in 2020, which elevated 40 per cent to a brand new excessive of 1,773.2 tonnes in comparison with 1,269.2 tonnes in 2019.
Most of the expansion got here within the type of gold-backed exchange-traded funds (gold ETFs) and was aided by bar and coin demand development within the second half of 2020.
Demand for ETFs grew by 120 per cent in 2020 at 877.1 tonnes in comparison with 398.3 tonnes in 2019.
In addition, the report revealed that over-the-counter (OTC) exercise, which isn’t instantly captured within the information set, was additionally sturdy all year long.
However, within the fourth quarter, there was a notable decline in funding demand for gold ETFs with outflows totalling 130 tonnes sequentially.
On the availability entrance, the report revealed that the overall annual gold availability additionally took a success in 2020 and was 4 per cent decrease at 4,633.1 tonnes in comparison with 4,819.9 tonnes, the biggest annual fall since 2013.
The drop in provide might be largely defined by coronavirus-related disruption to mine manufacturing, offset by a marginal 1 per cent improve in recycling to 1,297.4 tonnes for 2020 in comparison with 1,281.9 tonnes in 2019.
Meanwhile, gold shopping for by central banks slowed by 59 per cent in 2020, at 273 tonnes in comparison with 668.5 tonnes in 2019, it famous.
However, the fourth quarter noticed a return to modest internet shopping for as world official reserves grew by 44.8 tonnes in the course of the quarter, greater than reversing the 6.5 tonnes of internet gross sales from the third quarter, it mentioned.
Nevertheless, regardless of outflows within the fourth quarter, gold-backed ETFs noticed report annual inflows as a consequence of low rates of interest and excessive ranges of uncertainty, highlighting gold’s position as a protected haven asset, Street mentioned.
“Bar and coin demand also saw a strong recovery in the second half of the year, showing that retail investor sentiment remained relatively stable in these volatile markets. Overall, we believe the effects of the pandemic are likely to reverberate into the first quarter of 2021, and possibly beyond,” Street added.