30 July, 2020

COVID-19 continued to negatively impact the entire technology supply chain, leading to further significant falls in gold demand in Q2

  • The electronics sector recorded a large fall in demand in Q2, dropping 14% y-o-y to 55.6t, and gold used in other technology applications was 33% lower y-o-y at 8.4t
  • Dental demand continued its decline with a 30% y-o-y fall to just 2.6t, the first time demand has slipped below 3t in a quarter
  • Gold used in technology for the first half of 2020 was down 13% at 139.9t.
Tonnes Q2'19 Q2'20 YoY
Technology 80.7 66.6 -18%
Electronics 64.5 55.6 -14%
Other Industrial 12.5 8.4 -33%
Dentistry 3.7 2.6 -30%

Overall, demand in the technology sector in Q2 fell 18% y-o-y to 66.6t, a record quarterly low. While COVID-19 continues to severely impact the sector, there are signs of a partial recovery in the second half of 2020 as electronics fabrication hubs begin to emerge from lockdown and restart production. However, the shock of the crisis remains far-reaching and unprecedented, and as a consequence, forecasts may be revised in the coming weeks and months.


Gold used in electronics in Q2 fell 14% to 55.6t y-o-y, taking H1 demand down 11% to 114.5t, the lowest since 2002. As reported in Q1, declines of this magnitude are a direct consequence of weak consumer demand for end products, and of the widespread lockdowns and production facility shutdowns that have been enforced around the world. However, some parts of the sector have shown resilience and the gradual, relatively early end of lockdown in key production hubs such as Taiwan and Mainland China may feed through to a limited recovery in H2 2020, as discussed in more detail below.

The memory sector remained largely unaffected by COVID-19 in Q2, recording a 5% y-o-y increase. The pandemic created opportunities and additional demand – particularly for cloud computing and data storage, both of which require considerable numbers of memory chips. Looking forward, however, the forecast is less positive. The spike in demand due to greater homeworking needs is set to dissipate, while consumer electronics demand is likely to remain weak and some substitution threats remain (for example the potential use of silver wire in place of gold). Some major US firms are likely to place significant orders during Q3 to support memory projects that were hindered by supply chain issues in the first half, but some of this additional demand could be met by existing stocks of components that were manufactured prior to lockdown. 

The LED sector registered a slight recovery from Q1, but was still down 15% y-o-y. Emerging out of lockdown, factories in South Korea and Taiwan were reportedly back to 90% utilisation rates, but weak automotive and consumer electronic demand continued to temper end-user purchasing. Technology challenges to gold demand also remain, with Apple reportedly planning a new iPad launch during Q4 2020 using mini-LED technology, which uses less gold than traditional LED solutions. 

The Printed Circuit Board (PCB) sector recorded a 4-8% y-o-y decline in Q2. Taiwan’s emergence from lockdown led to a 5-10% increase y-o-y, but Mainland China and South Korea both registered declines of between 5-8% y-o-y. 5G and artificial intelligence applications both remained strong during the quarter, but the ongoing trend of miniaturisation continues to pose a threat to demand.  Constrained consumer spending remains a dark cloud on the horizon, and this is likely to further impact demand in the sector over the coming quarters.

The wireless sector saw robust momentum, with a 25-30% y-o-y increase in demand.  Growth has been driven by the acceleration of infrastructure projects in many countries, and this strength is expected to continue via a range of applications: 5G deployment, 3D sensor technology and aerospace projects show particular promise. It should be noted that, while the growth in this sector is undoubtedly positive, in absolute terms the volume of gold used in the wireless sector is considerably smaller than in other application areas.

Taiwan, which represents a relatively small percentage of electronics fabrication, was the only fabrication to record an increase in demand during the second quarter (+7%). Demand fell in Japan (-5%), Mainland China and Hong Kong (-7%), South Korea (-2%) and the US (-29%).

Other Industrial and dentistry

Other industrial and dental applications registered significant falls of 33% y-o-y to 8.4t and 30% y-o-y to 2.6t, respectively. This was primarily a consequence of lockdowns being imposed around the world. The most notable impacts were felt in India, where gold thread used in traditional clothing collapsed during lockdown, and a marked fall in the production of plating salts for luxury accessories in Italy.

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