Global gold demand drops by 19% in Q3 as COVID-19 drags on

Strong growth in global investment demand for gold in Q3 partially offset weakness as consumers batled COVID-19 effects:WGC

LONDON

According to the World Gold Council’s latest Gold, Demand Trends report the global gold demand dropped by 19 per cent year-on-year to 892 tonnes in the third quarter of 2020, as consumers continued to feel the impact of the COVID-19 pandemic.

According to the WGC report, this was the lowest quarterly total since Q3 2009. The Year-to-date demand for 2,972.1 tonnes was 10 per cent lower versus the same period in 2019.

While overall demand declined, Q3 saw significant growth in investment demand which rose by 21 per cent y-o-y. Investors globally bought 222.1 tonnes of gold bars and coins and an additional 272.5t through gold-backed Exchange Traded Funds, ETFs. Year-to-date, gold ETFs have increased their holdings by a record 1,003.3t.

However, the combination of continued social distancing restrictions in many markets, the economic slowdown, and a record high gold price in many currencies proved too much for many jewelry buyers. Demand declined by 29 per cent y-o-y at 333t, down from an already relatively anemic Q3 2019.

Quarterly inflows of 272.5t took global holdings of gold-backed ETFs to a new record of 3,880t. While the pace slowed a little from H1, sustained inflows throughout Q3 demonstrate the continued motivation of ETF investors to add to their holdings.