Gold Sees Flat Action, WGC Highlights Demand Worries
Published on Jan 29, 2021 12:34
Gold stayed largely supported after testing around one week low as traders eyed the recent demand supply data and also tracked a rebound in the US equities. COMEX Gold currently trades flat at $1844 per ounce. World Gold Council (WGC) stated yesterday that the global gold market was ravaged by COVID-19 disruption throughout the year, while record high prices were a mixed blessing. Fourth quarter gold demand of 783.4t (excluding over-the-counter - OTC - activity) was 28% lower y-o-y, making it the weakest quarter since the midst of the Global Financial Crisis in Q2 2008. The coronavirus pandemic, with its far-reaching effects, was the driving factor behind weakness in consumer demand throughout 2020, culminating in a 14% decline in annual demand to 3,759.6t, the first sub-4,000t year since 2009.
Gold jewellery demand in Q4 fell 13% y-o-y to 515.9t, resulting in a full-year total of 1,411.6t, 34% lower than in 2019 and a new annual low for data series. The world technology sector, impacted by disruption from COVID-19, saw gold usage decline 7% in 2020 to 307.9t. But the year ended on a relatively positive note, with Q4 seeing marginal y-o-y growth to 84t. Total annual gold supply of 4,633t was 4% lower y-o-y, the largest annual fall since 2013. The drop was largely explained by coronavirus-related disruption to mine production, offset by a marginal 1% increase in recycling to 1,297.4t for 2020.
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