Gold benefits from diverse sources of demand: as an investment, a reserve asset, a luxury good and a technology component. It is highly liquid, no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time.
Primarily driven by the COVID-19 pandemic and its far-reaching impacts, China’s gold demand in 2020 declined by 27% compared to 2019, the lowest recorded demand in a decade.
Global gold ETFs saw inflows of 13.8 tonnes (t) (US$1bn, 0.4%) in January, after two consecutive months of outflows in November and December, which had totalled 148.8t. Global assets under management (AUM) now stands at 3,765t (US$226bn), just 4% shy of the intra-month record 3,915.8t (US$244bn) set in early November.
How gold’s role in a portfolio differs from cryptos
Weak Q4 set the seal on an 11-year low for annual 2020 gold demand
2020 has been a memorable year for China’s economy and its gold market.
The COVID-19 pandemic raised uncertainty by both compounding existing risks while creating new ones. But by the end of last year, investors were optimistic that the worst was over.
By any measure, gold-backed ETFs and similar products (gold ETFs) had a remarkable year in 2020. Globally, gold ETFs had record annual net inflows of US$47.9bn, or 877 tonnes(t), collectively increasing their gold holdings by over a third, reaching all-time highs in tonnage (3,752t).