29 October, 2020

COVID-19 continued to negatively impact the global economy in Q3, although y-o-y declines in gold demand in the technology sector slowed.

  • Overall demand in the technology sector fell by 6% y-o-y to 76.7t, a notable improvement from the 16% y-o-y decline in Q2
  • The electronics sector recorded a minor fall in gold demand during the third quarter, dropping 6% y-o-y to 62.7t 
  • Gold used in other industrial applications and dental demand were both down by 10% y-o-y, to 10.9t and 3.1t respectively. 
Tonnes Q3'19 Q3'20 YoY
Technology 82.0 76.7 -6%
Electronics 66.4 62.7 -6%
Other Industrial 12.1 10.9 -10%
Dentistry 3.5 3.1 -10%

The volume of gold used in electronic and other industrial applications remained relatively soft compared with 2019 as the technology sector continued to feel the effects of the global pandemic. On a quarterly basis, though, demand improved significantly. Some of the key Asian fabrication hubs in the electronics industry began to emerge from lockdown to ramp-up production, which catalysed a recovery from the record lows seen in Q2. Demand for gold in electronics increased 10% q-o-q, while other industrial and dental applications saw quarterly growth of 32% and 22%, respectively. 

It is important to note, however, that overall technology demand in Q3 still saw a small y-o-y decline, and y-t-d demand in the sector is 10% lower at 217.3t. The ongoing uncertainty caused by the pandemic remains a major downside risk over the coming months.


Gold demand in the electronics sector fell 6% y-o-y to 62.7t – a recovery on the 12% y-o-y fall recorded during Q2. The rapid quarterly recovery is a consequence of component manufacturers restarting production facilities and their customers restocking. But weak consumer confidence negatively impacted big ticket purchasing worldwide during Q3. While we remain confident that H2 2020 will see stronger demand than H1, the sector’s performance will undoubtedly remain heavily influenced by the evolution of the pandemic. Additionally, sanctions directed at companies like Huawei could further hit short-term demand.

The LED sector registered y-o-y losses of around 6%. Weakness in the automotive sector drove the majority of the Q3 y-o-y decline. Compared with the heavy losses reported in H1, however, this represents a healthy quarterly upturn as major LED hubs, such as South Korea and Taiwan (Province of China), retained their 90% utilisation rates within their factories. Biosensors and wearables provided some respite, with devices such as the Apple Watch series 6 utilising new high-end infrared LEDs. There was also a surge in demand for 3D sensors in smartphones. However, as reported previously, the expansion of mini-LEDs remains a threat; this technology (which in some cases uses no gold) is being adopted in a growing range of products and will likely further weaken future gold demand in the sector.

The wireless sector maintained the strength of recent quarters, growing between 2 to 5% y-o-y. 5G infrastructure projects continued to drive demand in the sector, with new 3D sensors in smartphones and Artificial Intelligence (AI) systems also contributing to demand. It should be noted that, while the continuing 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 areas.

The memory sector, which has remained largely unaffected by COVID-19 to date, was flat during Q3. The sector saw steady ongoing demand from data storage, PCs and laptops as more workers were equipped to work from home. In China, demand has also generally been strong with companies such as Huawei building stock to prepare their inventories for 2021. However, some pressures have been noted: higher adoption of competing technologies that use less – or no – gold has been reported (for example, copper wire substitution and increasing use of flipchip packaging), along with the broader threat of weakening consumer spending, which can have a direct impact on the memory sector given such chips are ubiquitous in consumer electronic devices.1

Finally, the Printed Circuit Board (PCB) sector recorded a y-o-y decline of between 2 to 5% in Q3. High speed computing applications were positive and are projected to provide support to the sector into 2021. However, this was offset by the ongoing weakness of the automotive sector and general sluggishness in smartphone shipments. Constrained consumer spending remains a major concern and this is likely to further impact demand in the sector over the coming quarters.

Mirroring our research in Q3, Taiwan (Province of China) – which represents a relatively small percentage of electronics fabrication – was the only fabrication hub in the world to record an increase in demand during the quarter, of 1.9%. Japan (-9.5%), Mainland China and Hong Kong (-3.6%), South Korea (-0.9%) and the US (-5.3%) all saw declines.

Other industrial & dentistry

Demand for gold used in other industrial and decorative applications was 10% down y-o-y at 10.9t. The main reason for the weakness was the challenging global economic backdrop, against which demand for luxury gold-plated accessories has remained cautious. Fragile demand in India for jari – gold thread used in traditional clothing – was again a significant contributor to the decline.

Dental demand for gold fell 10% y-o-y to 3.1t as the high gold price accelerated the structural shift to other materials. Furthermore, it is possible that demand in the sector declined due to patients being unable to access dental treatments amid coronavirus restrictions. 

Finally, gold’s role in the medical diagnostic sector continues to gain importance as new COVID-19 tests are developed. While this application has limited impact on demand due to the small quantities used, gold is a critical component of these tests and is playing an increasingly important role in fighting the pandemic.2


  1. Flipchip packaging is a method of connecting semiconductors that eliminates the need for bonding wire in some devices

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