Mumbai: India’s total gold demand in Q3 2020 was down 30% to 86.6 tonnes year-on-year, which underscores the likelihood that the country may register its lowest annual gold consumption on record, according to the World Gold Council (WGC). Third-quarter demand was nonetheless 35% higher than Q2 2020 partially due to easing of lock down and some low prices in August that provided a small window of buying opportunities.

India’s gold jewellery demand in the year to date (January to September 2020) was down 57% to 170.7 tonnes on a year-on-year basis. Among the factors that affected India’s Q3 gold demand were Covid-related disruptions, bleak consumer sentiment, and high prices accompanied by volatility.

Speaking at the virtual launch of the WGC’s latest Gold Demand Trends report, Mr. Somasundaram PR, Managing Director, India, WGC, said, “Q3 tends to be relatively low generally due to seasonal factors like monsoons and inauspicious periods like Pitru-Paksh and Adhik Maas. Jewellery demand fell by 48% to 52.8 tonnes as jewellery purchases did not have any support of festivals or weddings. On the other hand, gold’s safe haven attributes and an anticipation of price rise paved the way for an increase in investment demand for gold bars and coins by 51% to 33.8 tonnes.”

Louise Street, Market Intelligence at the WGC commented, “The impact of COVID-19 is still being felt in the gold market across the world. The combination of continued social restrictions in many markets, the economic impact of lockdowns, and all-time high gold prices in many currencies proved too much for many jewellery buyers. We believe that this trend will likely continue for the foreseeable future.

“However, looking to the investor landscape we saw further record inflows into gold-backed ETFs in Q3, taking the global total to a record high. It was equally encouraging to see gold’s role as a safe-haven for retail investors shine through this quarter, as people continue to seek stability in volatile markets.”

The key findings included in the latest Gold Demand Trends report for Q3 2020 are as follows:

• Overall demand declined in Q3 by 19% year-on-year to 892t
  ETF inflows investors globally added 272.5t to their holdings, taking global holdings to a new record of 3,880t
• Bar and coin demand increased significantly by 49% year-on-year to 222.1t
• Global jewellery demand improved from a record low in Q2, but declined by 29% year-on-year to 333t
• Central banks were net sellers of 12t the first quarter of net sales since 2010
• Demand in the technology sector fell by 6% year-on-year to 76.7t
  Total supply declined 3% year-on-year