Gold journey through 2020, what happened and what will happen? By Investing.com

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© Reuters.

Investing.com – Global demand for gold fell 19% year-on-year to 892 tons in the third quarter of this year, as consumers continued to feel the impact of the Coronavirus (COVID-19) pandemic.

This demand was the lowest quarterly total since the third quarter of 2009.

The demand recorded 2,972.1 tons since the beginning of the year to date, which is 10% less compared to the same period in 2019, according to the latest report issued by the World Gold Council on gold demand trends.

While the total demand for gold decreased, the third quarter of the year witnessed a significant growth in investment demand, which rose by 21% year-on-year.

Worldwide, investors bought 222.1 tons of bullion and gold coins and an additional 272.5 tons through gold-backed ETFs.

Year-to-date, gold-backed ETFs increased their holdings at a record rate of 1,003.3 tons.

However, the combination of factors represented by the ongoing restrictions of social divergence in many markets, the economic slowdown and record-breaking rise in several currencies far outstripped the potential of many jewelery buyers.

The demand fell 29% year-on-year to 333 tons this quarter, thus down from the relatively weak demand recorded in the third quarter of 2019.

The quarterly inflows of 272.5 tons raised the global holdings of gold-backed ETFs to a new record of 3,880 tons.

While the pace has slowed slightly since the first half of the year, the continuous flows during the third quarter of the year show the continued motivation of ETF investors in addition to their holdings.

The price of gold in US dollars rose to a record high of 2,067.15 US dollars an ounce in early August.

This was followed by a decline, with the price closing the quarter at $ 1,900 an ounce.

We have also seen record price increases in various other currencies, including the rupee, the yuan and the British pound.

Investment in bullion and gold coins jumped to 222.1 tons in the third quarter of the year, an increase of 49% year-on-year.

Most major retail markets saw strong growth. We have seen the largest increases in volume in Western markets, such as China and Turkey, in contrast to continued heavy sales in Thailand.

The pandemic affected the jewelry sector the most. The vulnerability caused by the outbreak of the Coronavirus was exacerbated by the high, as demand in the third quarter of the year decreased by 29% year-on-year to reach 333 tons.

While China and India accounted for the largest decrease in the volume, which was twice the decline recorded globally.

Central banks achieved a modest net sales of 12 tons of gold in the third quarter.

This was the first quarter of net sales since the fourth quarter of 2010, mainly due to concentrated sales by two banks.

Buying continues at a moderate pace, driven by the need for diversification and protection in a negative price environment.

Louise Street, of the Market Intelligence Group at the World Gold Council, said: “We are still feeling the impact of the Coronavirus pandemic on the gold market around the world.

The combination of factors represented by persistent social distancing restrictions in many markets, the economic impact of curfew restrictions, and the unprecedented rise in the price of gold in several currencies far exceeded the potential of many jewelery buyers. We believe that this trend will likely continue in the near future. ”

“However, looking at the investor scene, we saw more significant inflows into gold-backed ETFs in the third quarter, bringing the global total to a record high,” Street added.

It was also encouraging to see the shine of gold’s role as a safe haven for retail investors during this quarter of the year, as these individuals continue to seek stability in volatile markets. ”

Indications

Total demand in the third quarter of the year decreased by 19% year-on-year, to 892 tons

Investors in global gold-backed ETF flows added 272.5 tons to their holdings, raising global holdings to a new record of 3,880 tons.

Demand for gold bars and coins increased dramatically, by 49% year-on-year, to 222.1 tons

Global jewelery demand improved from a record low in the second quarter of the year, but fell 29% year-on-year to 333 tons.

Central banks were net sellers with sales of 12 tons, the first quarter of net sales since 2010.

The demand in the technology sector decreased by 6% year-on-year, to 76.7 tons

Total supply decreased 3% year-on-year.

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