30 April, 2020

COVID-19 negatively impacted the entire technology supply chain during Q1, leading to sector-wide falls in gold demand

  • The electronics sector recorded a fall in demand, dropping 7% y-o-y to 59t
  • Gold used in other technology applications was 13%lower y-o-y at 11.2t during the quarter, and dental demand continued its decline with a 9% y-o-y fall to just 3.2t.
Tonnes Q1'19 Q1'20 YoY
Technology 79.9 73.4 -8%
Electronics 63.5 59.0 -7%
Other Industrial 12.8 11.2 -13%
Dentistry 3.5 3.2 -9%

Overall, demand in the technology sector fell 8% y-o-y  to 73.4t – the lowest figure in our quarterly historical series. The fall recorded in the electronics sector was of a similar magnitude, highlighting the immediate and  severe impact of the ongoing COVID-19 crisis on the entire sector. The shock of the crisis is considerable, and forecasts may be revised as a consequence in the coming weeks and months.


Gold used in electronics fell 7% to 59t y-o-y. Manufacturers operating in countries under lockdown have been forced to shut down entire production facilities, while the global impact on employment, income and general consumption negatively impacted demand for consumer electronics. Despite this, some sectors within the electronics industry may be more resilient to these challenges, as discussed below.

China’s LED sector was hit hard in Q1, registering declines of more than 30% y-o-y as factories were forced to close in February. South Korea and Taiwan, Province of China, also fell around 15-20% during the quarter, meaning LED output worldwide fell ~25%. The near-term outlook for the sector is weak; demand for consumer electronics has been stifled by the pandemic, and this in turn is severely impacting demand for LEDs. Smartphone sales reportedly fell by 20-30% during the first quarter and a quick recovery is unlikely.

The memory sector performed relatively well, staying stable during the quarter. The sector was insulated from the worst effects of coronavirus in Q1 as the majority of production is located outside China. Additionally, the surge in home working during the quarter lent a boost to DRAM demand. Currently, gold demand appears relatively stable in this sector, but there are uncertainties for the remainder of 2020; if COVID-19 continues to severely impact economic activity around the world then any recovery may be slow, with an inevitable knock-on for consumer spending.

China is a key player in the wireless sector, which consequently suffered considerable upheaval during the first quarter. China’s shutdown resulted in a major transfer of manufacturing capability to Taiwan, Province of China, and South Korea. However, the Chinese government has reportedly accelerated many 5G infrastructure projects, bringing them forward into the second quarter, which should boost a recovery in gold usage in Q2. Given China is now coming back online and demand for connectivity is growing globally, we expect to see a very quick recovery in the wireless sector, and a return to the pre-COVID-19 trajectory for strong growth.

The Printed Circuit Board (PCB) sector also suffered from shutdowns during Q1. Similar to the wireless sector, Taiwan, Province of China, and South Korea picked up some of the slack caused by the China shutdown. However, South Korea also saw a limited shut down and weakened demand from the automotive sector, traditionally their most important end user. Post COVID-19, we maintain a positive outlook for the PCB sector as a result of the growth momentum in both 5G and artificial intelligence related applications.

Three of the four major electronics fabrication hubs around the world recorded falls in demand during Q1 2020; Japan (-3%), Mainland China and Hong Kong (-20%) and South Korea (-4%). US demand was flat y-o-y, and Taiwan, Province of China, (which represents a relatively small percentage of fabrication) recorded a 6% increase as a consequence of the shutdown in Mainland China.

Other Industrial & dentistry

Dental demand continued its long-term decline, falling 9% y-o-y to 3.2t, as gold continues to lose market share to more cost-effective and cosmetically-sympathetic alternatives. 

Meanwhile, other industrial applications fell 13% to 11.2t. This was a result of COVID-related disruptions in key markets, such as the plating of costume jewellery in East Asia and the plating of luxury accessories, primarily in Italy. The importance of gold’s place in the diagnostics sector has been highlighted by the ongoing COVID-19 pandemic and considerable research is ongoing into this currently. This will not make a material difference to gold demand in the sector but may help hasten the end of the crisis. 

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