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Gold demand skyrockets 80% as pandemic fuels investor dash for safety

Gold demand skyrockets 80% as pandemic fuels investor dash for safety
Global investment demand for gold soared to a four-year high of 539.6 metric tons in the first quarter of the year, as investors sought safe-haven assets amid the coronavirus outbreak.

The World Gold Council (WGC) said in a report that the pandemic was the single biggest factor influencing gold demand.

According to the report, the inflows of 298 metric tons for gold-backed ETFs pushed global holdings in those products to a new record high of 3,185 metric tons for the quarter. Total global first-quarter gold demand was at 1,083.8 metric tons, up one percent from the same period last year. 

The WGC said that total bar and coin investment had fallen to 241.6 metric tons, as a 19 percent drop in bar demand (to 150.4 metric tons) overpowered a sharp jump in demand for gold coins (up 36 percent) due to safe-haven buying by Western retail investors.

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Jewelry demand, “unsurprisingly,” was particularly hard hit by the effects of the outbreak, with quarterly demand down almost 40 percent year-on-year.

Central banks continued to buy gold in significant quantities, although at lower rates than in the first quarter of 2019. Net purchases amounted to 145 metric tons. The virus also caused disruption to gold supply, with mine production falling to a five-year low of 795.8 metric tons.

READ MORE: ‘The Fed can’t print gold:’ Bank of America sees bullion price surge to $3,000 as paper money crumbles

The yellow metal is heading for its biggest monthly gain since 2016. It was trading more than two percent higher at 1,716.35 an ounce on Thursday. Economists project the price of gold to hit record highs in the near future.

For more stories on economy & finance visit RT's business section

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