Mining: global demand for gold at the lowest level in 13 years

Global demand for gold in the first quarter of 2021 remained near its lowest level since 2008, as strong investor sales in Europe and North America offset the pickup in consumer buying in Asia, the Chinese said on Thursday. World Gold Council (WGC).

Traditionally viewed as a safe asset, investors bought gold in unprecedented amounts last year as the coronavirus swept through the global economy.

This momentum is now reversing as the global economy recovers, with investors unwinding some of their positions and consumers in Asia returning to the market.

Global demand was 815.7 tonnes from January to March, up slightly from 813.7 tonnes in October-December last year, but down 23% from the first quarter of 2020 , said the WGC in its latest quarterly report.

Consumer demand in China, typically the largest market, rebounded dramatically to 286.4 tonnes, the highest since the first quarter of 2017, the WGC said.

But exchange-traded funds (ETFs) storing gold primarily for large Western investors unloaded 177.9 tonnes, their largest divestment since the fourth quarter of 2013.

This sale has passed  the price  of  gold  to a record high of $ 2,072.50 an ounce in August to about $ 1,700 in March, helping to stimulate demand from Asian buyers who are often discouraged by high prices, said the WGC.

ETF sales slowed sharply in April and gold prices retreated to $ 1,800. WGC analyst Krishan Gopaul said consumer and investment demand is likely to remain strong this year, albeit below recent highs.

Central banks in the first quarter bought 95.5 tonnes of gold, the most since the second quarter of 2020 but significantly less than was usual in 2018 and 2019, the WGC said.