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Demand for gold for investment purposes increased by 80 percent in the first quarter of 2020, data from the World Gold Council show. Total demand, which includes coins, bullion and ETFs, peaks in 4 years. 539.6 metric tons. The figure includes a 298 metric ton entry to gold-based index funds, up to a record 3 185 metric tons in the quarter.
Total gold demand in the first quarter was 1,083.8 metric tons, an increase of 1% compared to the same period last year. As expected, a pandemic is the most important factor affecting demand and prices for the precious metal.
Data shows that investment in bullion and coins decreased to 241.6 tonnes (6% yoy decrease) due to a 19% decrease in bullion demand (to 150.4 tonnes). The 36% increase to 76.9 tons of currency demand could not offset the reported decrease.
The demand for precious metals as a way to store value in times of crisis has raised the price to a maximum of 8 years. In foreign currency, investment gold purchases reach $ 55 billion for the unprecedented peak of spring 2013.
As expected, jewelery demand has been particularly affected by the crisis, falling 39% year-on-year to a record low of 328.5 tonnes. China, the largest market, reported a decrease of 65%. Gold demand for production has also fallen to a record low of 73.4 tonnes, a drop of 8%.
Central banks continue to buy significant quantities, but purchases fall 8% to 145 tons. The reduction is expected next quarter, after Russia also said it would suspend the program.
The virus also created problems in production, reducing it to a 5-year minimum of 795.8 tons, or 4%.
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