January 30, 2020 / 5:02 AM / 23 days ago

Gold demand dipped in 2019 as high prices repelled retail buyers -WGC

    By Peter Hobson
    LONDON, Jan 30 (Reuters) - Global demand for gold edged
lower last year as hefty purchases by investors and central
banks were offset by weaker sales to retail consumers who balked
at rising prices, the World Gold Council (WGC) said on Thursday.
    Prices surged 18% last year to the highest since 2013
as global economic growth slowed. 
    Gold is traditionally seen as a safe store of value in times
of political and economic uncertainty and becomes more popular
when interest rates fall, as they did last year.
    But higher gold prices, which hit record levels in some
currencies, dampened interest in gold jewellery and retail bars
and coins. 
    This dynamic is likely to continue through 2020, with
central banks and nervous investors buying while retail
consumers pull back, said the WGC's head of market intelligence,
Alistair Hewitt.
    "I don't see any of those (factors) fading any time soon,"
he said. 
    Global demand for gold was 4,355.7 tonnes last year, down 1%
from 2018’s 4,401 tonnes, the WGC said in its latest quarterly
Gold Demand Trends report.
    The year ended on a weak note, with demand over
October-December at 1,045.2 tonnes down 19% from the same period
in 2018, the WGC said. 
    For the full year, use of gold for jewellery fell 6% to
2,107 tonnes, with consumption falling 9% in India and 8% in
China – the two largest markets. 
    Purchases of gold bars and coins declined by 10% in India
and 31% in China, pulling total global demand down 20% to 870.6
tonnes. 
    Central banks and other sovereign entities bought 650.3
tonnes of gold last year, just 5.9 tonnes less than 2018's more
than 50-year high of 656.2 tonnes. 
    Holdings of gold in exchange-traded funds increased by 401.1
tonnes last year compared to a 76.2-tonne increase in 2018. 
    On the other side of the market, global gold supply rose 2%
to 4,776.1 tonnes last year, thanks to an 11% increase in
recycling, the WGC said. 
    
    GOLD DEMAND (T)*    
                              2019       2018  % change
 Jewellery                    2107     2240.2        -6%
 Technology                  326.6      334.8        -2%
 Investment                 1271.7     1169.8         9%
 - Bar and coin              870.6     1093.6       -20%
 - ETFs and similar          401.1       76.2       426%
 Central banks               650.3      656.2        -1%
                                                        
 TOTAL                      4355.7       4401        -1%
    
                         Q4 2019    Q4 2018    % change
 Jewellery                   584.5      646.1       -10%
 Technology                   83.8       84.3        -1%
 Investment                  267.3      398.9       -33%
 - Bar and coin              240.6      285.2       -16%
 - ETFs and similar           26.8      113.7       -76%
 Central banks               109.6      165.6       -34%
                                                        
 TOTAL                      1045.2       1295       -19%
    * World Gold Council, Gold Demand Trends Q4 2019

 (Reporting by Peter Hobson; Editing by David Gregorio)
  
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