Gold did not withstand the Covid crisis.
Total demand for the precious metal fell to 3,759.6 tonnes last year, after falling below the 4,000 tonnes mark since 2009. “
The global gold market has been ravaged by the pandemic of Covid-19 throughout the year,
”notes the World Gold Council (CMO) in its report published on Thursday.
The end of the year was not marked by signs of recovery, quite the contrary.
In the fourth quarter, demand fell 28% to 783.4 tonnes from the same period in 2019, becoming "
the weakest quarter since the start of the financial crisis
" in 2008, note the report's authors.
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The uncertain economic context triggered by the Covid-19 pandemic should have been such as to favor safe havens such as gold, considered by investors as the first of them.
But the surge in prices to more than $ 2,000 an ounce at the beginning of August especially encouraged speculation on financial products indexed to gold (ETF) and contributed to postponing the purchase of physical gold, become too expensive.
Thus, “
despite 130 tonnes of outflows in the fourth quarter, gold-backed exchange-traded funds recorded record annual inflows: global holdings increased by 877.1 tonnes in 2020. In addition, there is evidence that the he over-the-counter activity was also robust throughout the year,
”says the CMO.
Too expensive gold
Conversely, the demand for gold jewelry in the fourth quarter fell by 13% compared to 2019 to reach 515.9 tons.
Over the year as a whole, this sector recorded a demand of 1,411.6 tonnes, or 34% less than the previous year.
"
Consumers around the world have remained at the mercy of lockdowns, economic weakness and high gold prices
."
While demand for ingots and coins increased by 10% in the fourth quarter and by 3% over the whole of 2020, it remains, at 896.1 tonnes, "
low compared to the ten-year average (1199, 5 tons)
”, specifies the CMO.
The technology sector, affected by the disruptions linked to the health crisis, also saw its use of gold decrease by 7% in 2020 to 301.9 tonnes.
Finally, central bank purchases slowed sharply last year, especially in the second half of the year.
Annual central bank purchases amounted to 272.9 tonnes, down 59%.
The global supply of gold has also declined under the impact of the crisis which has caused an interruption in mining production.
The total annual gold supply amounted to 4,633 tonnes, down 4% from the previous year, the largest annual drop since 2013, underlines the CMO.
The latter notes, however, that the supply linked to recycling held up with an increase of 1% to 1,297.4 tonnes in 2020.
