Global gold demand declines in first half of 2020, even as ETF inflows hit record

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Global demand for gold declined in the second quarter and first half of this year as a whole, but demand for gold as an investment hit a record high as holdings of exchange-traded funds hit a record low. record at the end of June, according to a report. of the World Gold Council released Thursday.
Total global demand for gold, which includes the metal for investment, jewelry, technology and central bank purchases, fell 11% year-on-year in the second quarter, to 1,015.7 metric tons, pulling demand for the first half of the year down 6% to 2,076 metric tons.

The COVID-19 pandemic was the main influence on the gold market in the second quarter, “dramatically reducing consumer demand, while supporting investment,” the report says.
In the first six months of this year, total gold investment demand, which includes gold-backed ETFs, as well as bullion and coins, hit a record high of 1,130.7 metric tons, with a record value of $ 60 billion.

“The global response to the pandemic from central banks and governments, in the form of rate cuts and massive cash injections,” fueled record inflows of 734 metric tonnes in gold-backed ETFs for the first time. half year of the year to a new record 3,621 metric tons, according to the report. The influx helped push gold prices up 17% in US dollars for the period.
In contrast, investment in bullion and coins in the first six months of the year fell to an 11-year low, down 17% year-over-year to 396.7 tonnes. “Many countries remained under lockdown restrictions in the second quarter,” the World Gold Council said. “It wreaked havoc on demand for bullion and coins, even as the price of gold rallied, hitting successive eight-year highs in US dollars and breaking new records in many other currencies.
Gold futures traded on Wednesday at $ 1,953.40 an ounce, the best result for a busiest contract on record.
The report noted a divergence in investor behavior between East and West, with a “profit-taking pattern” dominating sentiment in the East, particularly in Asia and the Middle East, but “l ‘Safe haven buying and dynamic investing’ taking center stage in Western markets, such as Europe and North America, where demand for bullion and coins has experienced “substantial growth.”
However, second-quarter jewelry demand fell 53% year-over-year to a record quarterly low of 251 metric tons, causing first-half demand to drop 46% to 572 tons. China’s first-half jewelry demand fell 52% year-over-year to 152.2 tonnes, with the World Gold Council citing “the lasting impact of COVID-19 on consumer wallets.”
“Consumers around the world have felt the impact of the market lockdown and the resulting economic downturn,” the report says. China, which was the first market to emerge from the lockdown, was the only one to see a recovery after “extreme weakness in the first quarter.”
Also for the first half of 2020, gold used in technology fell 13% to 139.9 metric tons. Meanwhile, net central bank purchases amounted to 233 tonnes, down 39% year-over-year for the six-month period.
Meanwhile, the total global gold supply fell 6% in the first half of this year to 2,192 metric tons, due to “strict coronavirus lockdowns in major mining countries,” the World Gold Council said. .

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