World Gold consumption may grow by 1.3% in 2020: report
CANBERRA (Scrap Register): World gold consumption is forecast to grow by 1.3% in 2020 and by 3.1% in 2021, reaching 4,760 tonnes in 2021, Australia’s Department of Industry, Innovation and Science said in its Resources and Energy Quarterly report.
Growth is expected to be driven by retail investment, jewellery demand and central bank gold buying, the report said.
Retail investment is expected to drive up global gold demand. Retail investment is forecast to rise by 20% in 2020, and by a further 3.0% (to 1,196 tonnes) in 2021. This strong growth in retail investment reflects political uncertainty in the US - impeachment proceedings against the US President - and geopolitical tensions in the Middle East. Also, a correction in global equity markets could potentially result in a flow of funds into gold, it noted.
Jewellery demand is forecast to rise by 9.1% (to 2,332 tonnes) in 2020, and by a further 4.6% (to 2,440 tonnes) in 2021, driven by jewellery consumption in India - the world’s second largest gold jewellery consumer. Economic growth, ongoing urbanisation, rising incomes and improved consumer sentiment, are all expected to contribute to higher jewellery demand in India. In addition, compulsory branding by Indian jewellery retailers in 2020 will provide Indian consumers with greater confidence and potentially support higher demand for gold, the report said.