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Gold Sees Good Buying Support Last Week

Published on Feb 01, 2021 11:25

Gold stayed supported last week, bouncing sharply after testing around one week low as accelerated risk aversion in world markets boosted the yellow metal on safe haven demand. The metal hit one week high of $1870 per ounce. World Gold Council (WGC) stated 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. 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, noted the WGC.

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