In 2020, the average annual gold price reached an all-time high of $1,770/oz, an increase of 27% year-on-year. This was largely due to the Covid-19 crisis and subsequent economic developments. Prices were moderately up, exceeding $1,650/oz in early March, but the pandemic sparked a fall across all asset classes and gold dropped to its 2020 minimum price of $1,474/oz.
However, by the end of March, investors started to look to safe-haven assets and this immediately affected the gold price, which peaked in August at a high price of $2,067/oz. Following this spike, gold stabilised at around $1,900/oz and rallied during Q4 until a second surge in the pandemic and the presidential election in the US, which resulted in a year-end gold price of $1,889/oz, delivering a 25% annual return.
During 2020, a time of market uncertainty, ultra-low interest rates and economic slowdown, gold ETF demand more than doubled to a record 877 tonnes — 23% of total gold demand (2019: 9%) and the second largest category after bars and coins, which was up 3% at 896 tonnes. For the eleventh consecutive year, central banks (led by Turkey, India and Russia) were net buyers of gold. Jewellery demand dropped by 34% to its lowest annual level of 1,412 tonnes and the technology sector fell by 7% year-on-year to 302 tonnes. Overall, the total gold demand for the year decreased by 14% to 3,760 tonnes.
Global gold supply in 2020 was down 4% to 4,633 tonnes as mine production fell by 4% to 3,401 tonnes (mainly Covid-related) and recycled gold supply rose by only 1% to 1,297 tonnes.