Mumbai: A report stated that from April to June, global gold demand fell by 11% to 1,015.7 tons, but during this period, investment demand for gold has increased substantially.
According to a report by the World Gold Council (WGC), due to lock-ups carried out by many countries to curb the spread of the COVID-19 pandemic, total gold during the period from April to June fell from 1,136.9 tons a year ago to 1,015.7 tons.
The World Gold Council’s “Second Quarter Gold Demand Trends” report stated that although the COVID-19 pandemic has severely reduced consumer demand, it has provided support for investment.
Total investment demand during the quarter increased by 98% to 582.9 tons, compared with 295 tons in the same period in 2019.
In the investment category, although the demand for gold bars and coins fell by 32% from April to June to 148.8 tons, compared with 218.9 tons in the second quarter of 2019, electronic trading funds (ETFs) for gold and similar products fell The report said that compared with 76.1 tons last year, it plummeted by 300% to 434.1 tons.
“Due to the historical liquidity injection and record low interest rates that have greatly reduced the cost of holding gold, COVID-19 has set off a perfect storm for gold investment. We have witnessed the surge in gold prices and the record-breaking gold-backed ETF in the first half of the year. Inflow. This year, said Louis Street of the WGC Market Intelligence Department.
Instead, Street added that consumer demand was brutally hit by the pandemic in the first quarter of 2020.
Global jewelry demand fell to a record low for the second consecutive quarter. In this quarter, jewelry demand fell by 53% to 251.5 tons, compared with 529.6 tons in the same period last year.
Technical gold demand also fell by 18% from April to June, to 66.6 tons, compared with 80.7 tons in the same period last year.
Similarly, the central bank’s net purchases fell by 50% in the second quarter of 2020 to 114.7 tons, compared with 231.7 tons in April-June last year.
“The decline in gold demand in the second quarter was mainly due to the weakness of the consumer market caused by the blockade of India and China. However, the impact of high prices on gold demand can only be measured after the situation returns to normal. WGC India Managing Director Somasundaram PR in a telephone conversation Tell PTI that we have seen consumers’ reaction to rising gold prices.
At the same time, the total supply in the quarter also fell 15% year-on-year to 1,034.4 tons.
Street pointed out that the ban on sales in Asia, Europe and North America has severely damaged the consumer-centric market, and jewelry demand has dropped to an unprecedented low level.
She believes that gold bullion and coin investment has slowed sharply because the sharp decline in Asian demand has masked the strong growth of Western investment.
“In the next six months, the consumer-centric market may remain sluggish, but continued uncertainty and the threat of further popularity mean that gold’s safe harbor status will attract investors for the foreseeable future. ”