The COVID-19 pandemic and ensuing economic lockdowns have slashed global growth forecasts for 2020. 

With varied expectations around the speed of the economic recovery, we analyse the potential performance of gold across four hypothetical scenarios provided by Oxford Economics:1

1) swift recovery

2) US corporate crisis

3) emerging markets downturn

4) deep recession.

Our analysis shows that higher risk and uncertainty combined with lower opportunity cost will likely be supportive of gold investment demand in 2020. This could offset the negative effect of lower consumer demand on gold performance as economic activity contracts.

Gold’s behaviour thereafter may depend on the speed of the recovery and the duration of monetary policy and fiscal stimuli.. 


Gold valuation made easy

Gold does not fit within traditional valuation models. Without a coupon or dividend, typical discounted cash flow models fail, and there are no expected earnings or book-to-value ratios either. But our analysis shows that valuing gold is intuitive. Its equilibrium price is determined by the intersection of demand and supply. Understanding the underlying drivers and interactions of gold demand and supply gives investors a robust framework upon which to determine gold’s performance (Focus 1).

In particular, gold's behaviour can be explained by four broad sets of drivers:

  • Economic expansion: periods of growth are very supportive of jewellery, technology and long-term savings
  • Risk and uncertainty: market downturns often boost investment demand for gold as a safe haven
  • Opportunity cost: levels of interest rates and strength of currencies influence investor attitudes towards gold
  • Momentum: capital flows, positioning and price trends can ignite or dampen gold's performance.
Focus 1 - Diagram


Focus 1: QaurumSM – Your gateway to understanding gold performance

Qaurum is a web-based quantitative tool that helps investors intuitively understand the drivers of gold performance. Behind its user-friendly interface, Qaurum is powered by the Gold Valuation Framework (GVF): an academically validated methodology based on the principle that the price of gold and its performance are determined by the equilibrium between demand and supply. 

Accessible from, the World Gold Council’s data and research site, Qaurum allows investors to assess how gold might react across different economic environments in three easy steps:

  • select a hypothetical macroeconomic scenario provided by Oxford Economics, a leader in global forecasting and quantitative analysis, or customise your own
  • generate forecasts of demand and supply (assuming no change in the gold price) and view the impact of key macro drivers on the balance of the gold market
  • calculate and visualise implied returns for gold that bring demand and supply back to balance.

Based on these, investors can use Qaurum to calculate the hypothetical performance of gold over five years as well as long-term returns implied by GVF and the available (or user-constructed) scenarios.

Additional details on GVF methodology can be found at

To review the scenarios in detail and their potential impact on gold, access Qaurum.

1Oxford Economics (OE) is a leader in global forecasting and quantitative analysis and a specialist in modelling. Headquartered in Oxford, with offices around the world, OE employs 400 staff, including over 250 economists and analysts – making it the largest, independent forecaster.

Important disclaimers and disclosures

© 2020 World Gold Council. All rights reserved. World Gold Council and the Circle device are trademarks of the World Gold Council or its affiliates.

All references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced. Other content is the intellectual property of the respective third party and all rights are reserved to them. 

Reproduction or redistribution of any of this information is expressly prohibited without the prior written consent of World Gold Council or the appropriate copyright owners, except as specifically provided below. Information and statistics are copyright © and/or other intellectual property of the World Gold Council or its affiliates (collectively, “WGC”) or third-party providers identified herein. All rights of the respective owners are reserved.

The use of the statistics in this information is permitted for the purposes of review and commentary (including media commentary) in line with fair industry practice, subject to the following two pre-conditions: (i) only limited extracts of data or analysis be used; and (ii) any and all use of these statistics is accompanied by a citation to World Gold Council and, where appropriate, to Metals Focus, Refinitiv GFMS or other identified copyright owners as their source. World Gold Council is affiliated with Metals Focus.

WGC does not guarantee the accuracy or completeness of any information nor accepts responsibility for any losses or damages arising directly or indirectly from the use of this information.

This information is for educational purposes only and by receiving this information, you agree with its intended purpose. Nothing contained herein is intended to constitute a recommendation, investment advice, or offer for the purchase or sale of gold, any gold-related products or services or any other products, services, securities or financial instruments (collectively, “Services”). This information does not take into account any investment objectives, financial situation or particular needs of any particular person. 

Diversification does not guarantee any investment returns and does not eliminate the risk of loss. The resulting performance of various investment outcomes that can be generated through allocation to gold are hypothetical in nature, may not reflect actual investment results and are not guarantees of future results. WGC does not guarantee or warranty any calculations and models used in any hypothetical portfolios or any outcomes resulting from any such use. Investors should discuss their individual circumstances with their appropriate investment professionals before making any decision regarding any Services or investments.

This information contains forward-looking statements, such as statements which use the words “believes”, “expects”, “may”, or “suggests”, or similar terminology, which are based on current expectations and are subject to change. Forward-looking statements involve a number of risks and uncertainties. There can be no assurance that any forward-looking statements will be achieved. WGC assumes no responsibility for updating any forward-looking statements.

Information regarding QaurumSM and the Gold Valuation Framework

Note that the resulting performance of various investment outcomes that can generated through use of Qaurum, the Gold Valuation Framework and other information are hypothetical in nature, may not reflect actual investment results and are not guarantees of future results. Neither WGC nor Oxford Economics provide any warranty or guarantee regarding the functionality of the tool, including without limitation any projections, estimates or calculations.