Over 60% of gold demand is for investment and jewellery

Gold remains the most sought after metal for various purposes with new markets emerging around the world. With the demand for various uses, gold for jewellery and investment continues to dominate.

According to data compiled by the trading news site BuyShares, jewellery and investment account for 37.29% and 26%, respectively, of total gold demand worldwide. As of September 2020, total global demand for gold stood at 5.29 mln kilos or 186.8 mln ounces.

Central banks’ demand for gold accounts for 12.14%. Other notable sectors in gold demand include bar demand (7.45%), industry (6.07%), electronics (4.86%), coins minting (3.85%), medals (1.13%), and other (0.92%). Dentistry had the least demand at 12,587 kilos or 0.23%.

The research highlighted the growth of gold as an investment avenue.

“Gold as an investment is subject to cyclical volatility since many investors speculate on its value. The high demand for gold for investment can be linked to the fact that the precious metal is considered a safe haven in the event of market volatility,” explained the report’s author Justinas Baltrusaitis.

“This year, the market experienced the highest volatility rate due to the economic impact of the coronavirus pandemic. In general, gold can be used in portfolios to protect the purchasing power, reduce volatility, and minimise losses during moments of market shock,” he said.

The BuyShares research also overviewed countries with the highest demand for gold.

The research reviewed 15 top countries with the demand totalling to 2,042,725 kilos as of September 2020.

China has the largest share at 700,442 kilos, while India is second at 625,561 kilos.

The United States is a distant third with its gold demand almost five times less than China, at 148,316 kg. Turkey and Germany emerged fourth and fifth at 100,380 kg and 90,472 kg, respectively.