Global gold demand will fall by 14 per cent in 2020 to an 11-year low, according to new data from the World Gold Council today (28 January).
Global gold demand in 2020 was 3,759.6 tons, down 14 percent from 2019, the data showed.
Gold jewelry demand dropped the most, to 1,411.6 tons, down 34 percent from 2019.
Wang Lixin, managing director of the World Gold Council in China, said: "This is also a relatively low year in the past 10 years. The main reason is that the global economy is not normal due to the epidemic, which makes it difficult for many consumers to buy (gold) products.
Although the demand for gold jewelry dropped by more than 30 percent, the global investment demand for gold totaled 1,773.2 tons, up 40 percent from 2019, especially for gold ETFs, Wang said.
Data show that as of the end of December 2020, the global gold ETF reached 3751.5 tons, an increase of 23% compared to 2019.
Wang Lixin, managing director of the World Gold Council in China, said the turmoil in financial markets and increased economic uncertainty caused by the outbreak have led many investors to use gold as a safe haven for their allocation.
In 2020, China's ETF market will add a new (gold) ETF (fund) to the market, which is also an innovation of the global gold ETF.
The data also showed that central bank purchases of gold slowed sharply in 2020.
Net gold purchases by global central banks were 272.9 tonnes in 2020, down 59 per cent from 2019.
Despite the overall decline in gold demand in 2020, global demand for gold bars and coins will increase by 3%, mainly from China and India.
Global demand for gold bars and coins reached 896.1 tons in 2020, up 3 percent from 2019, the data showed.
Global sales of gold bars and bars rose 10 percent in the fourth quarter, mainly due to a recovery in sales in China and India in the second half of 2020, industry analysts said.
Gold analyst Li Yang: The international gold price has seen a significant correction in the fourth quarter (2020), with the lowest price reaching $1,765 (per ounce). In this process, the decline of the overall price also supports many investors to buy this kind of gold investment jewelry.
The second reason is the approach of the traditional festival, especially in China, but also in India, the demand for gold, coins and bars has also increased significantly in Asia.
Global demand for gold bars and coins rose 10 percent in the fourth quarter of 2020 from a year earlier to 269 tons, a third of the entire year's demand, the data showed.
According to industry insiders, due to the weak global gold market in 2020, many jewelry processing enterprises will suffer a big blow, but Chinese jewelry processing enterprises will upgrade equipment and develop new products in this period.
WGC China Managing Director Wang Lixin: Manufacturers are taking full advantage of this opportunity to upgrade their products and gradually introduce new products to the market.
Therefore, we are also very hopeful that in the next one or two years, there will be updated gold jewelry will be brought to the market.
