Gold demand inched up to 1,083.8 tonnes (t) in Q1, supported by investment
The global COVID-19 pandemic fuelled safe-haven investment demand for gold, offsetting marked weakness in consumer-focused sectors of the market.
Total Q1 demand grew marginally to 1,083.8t (+1% y-o-y). The coronavirus outbreak, which swept the globe during the first quarter, was the single biggest factor influencing gold demand. As the scale of the pandemic – and its potential economic impact – started to emerge, investors sought safe-haven assets. Gold-backed ETFs (gold ETFs) attracted huge inflows (+298t), which pushed global holdings in these products to a new record high of 3,185t. Total bar and coin investment fell to 241.6t (-6% y-o-y) as a 19% drop in bar demand (to 150.4t) overpowered a sharp jump in demand for gold coins, up 36% to 76.9t, due to safe-haven buying by Western retail investors. Jewellery demand, unsurprisingly, was particularly hard hit by the effects of the outbreak; quarterly demand dropped 39% y-o-y to a record low for our series of 325.8t. Technology demand also fell to a new low for our data series of 73.4t (-8% y-o-y). Central banks continued to buy gold in significant quantities, although at a lower rate than in Q1 2019: net purchases amounted to 145t (-8% y-o-y). The virus also caused disruption to gold supply: mine production fell to a five-year low of 795.8t (-3% y-o-y).