Gold demand has yet to recover fully from COVID-19, says WGC

LONDON (Reuters) - Global demand for gold rose in the second quarter to its highest quarterly level in a year as central banks and investors stepped up purchases, the World Gold Council (WGC) said on Thursday.

FILE PHOTO: Newly casted ingots of 99.99% pure gold are stored after weighing at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin

But with jewellery fabrication still reeling from the COVID-19 pandemic, gold use over the first six months of 2021 was lower than in any first half since 2008, the WGC said in its latest quarterly report.

Demand from jewellers and central banks plunged when the novel coronavirus spread last year, unsettling state finances, shutting stores and hitting incomes.

This was initially offset as larger investors in Europe and the United States sought a safe place to store wealth. They stockpiled huge amounts of gold, briefly driving prices above $2,000 an ounce, but stopped when economies returned to growth.

During the April-June quarter, global demand for gold was 955.1 tonnes, down from 960.5 tonnes in the same period of 2020 and 1,132.1 tonnes in the second quarter of 2019, the WGC said.

Demand in the first half of 2021 totalled 1,833.1 tonnes, down from 2,044 tonnes in 2020 and 2,195.5 tonnes in 2019, it said.

Graphic: Global gold demand -

Exchange traded funds (ETFs), which store gold for many larger investors, added to their stockpiles in the second quarter after shrinking them rapidly in the two previous quarters, the WGC said.

Central banks during April-June bought more gold than in any quarter for two years.

Demand from jewellers and investors in gold bars and coins, however, was lower than during the first quarter, but still higher than during April-June 2020.

The WGC said it expected global jewellery demand for the full year to be below pre-pandemic levels at 1,600-1,800 tonnes.

It forecast demand from investors, both in ETFs and bars and coins, at 1,250-1,400 tonnes for the full year, down from 2020 but around its average over the last decade.

Following are numbers and comparisons for the second quarter.


Q2’21 Q1’21 Q2’20 % %

change, change,

Q-on-Q Y-on-Y

Jewellery 390.7 483.0 244.5 -19% 60%

Technology 80.0 81.0 68.1 -1% 18%

Investment 284.5 180.7 584.2 57% -51%

- bar and coin 243.8 350.7 156.7 -30% 56%

- ETFs & similar 40.7 -170.0 427.5 -124% -90%

Central banks 199.9 133.3 63.7 50% 214%

Gold demand 955.1 878.0 960.5 9% -1%

* Source: World Gold Council, Gold Demand Trends Q2 2021

Reporting by Peter Hobson; editing by Barbara Lewis