Business

‘Pandemic, high prices hit gold demand’

During the quarter, global gold demand dropped by 19% year-on-year to 892 tonnes as consumers continued to feel the impact of the COVID-19 pandemic.  

Demand for gold in India declined 30% to 86.6 tonnes in the July-September quarter as compared with 123.9 tonnes a year earlier due to COVID-19 disruptions and record high prices, data released by the World Gold Council showed.

Total jewellery demand during the quarter decreased by 48% to 52.8 tonnes. In terms of value, jewellery demand fell 29% to ₹24,100 crore from the year-earlier period. However, the demand for gold coins, bars and ETF had seen a surge. “Total investment demand increased 52% to 33.8 tonnes during the quarter,” Somasundaram PR, MD India, World Gold Council said. In terms of value, gold investment demand was ₹15,410 crore.

During the quarter, global gold demand dropped by 19% year-on-year to 892 tonnes as consumers continued to feel the impact of the COVID-19 pandemic.

“This was the lowest quarterly total since Q3 2009. The year-to-date demand of 2,972 It was 10% lower vs the same period in 2019,” WGC said in its latest gold demand trend report.

While overall demand declined, the quarter saw significant growth in investment demand which rose by 21% y-o-y. Investors globally bought 222.1 tonnes of gold bars and coins and an additional 272.5 tonnes through gold-backed ETFs.

Year-to-date, gold ETFs have increased their holdings by a record 1,003.3 tonnes.

However, the combination of continued social distancing restrictions in many markets, the economic slowdown, and a record high gold price in many currencies, proved too much for many jewellery buyers.

Demand declined by 29% y-o-y at 333 tonnes, down from an already relatively anaemic same quarter of 2019.

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Printable version | Nov 25, 2020 5:58:53 AM | https://www.thehindu.com/business/pandemic-high-prices-hit-gold-demand/article32976066.ece

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