WGC: Gold Supply Hit Lowest Level in Seven Years

SEATTLE (Scrap Monster):  The Q1 Demand Trends Report released by the World Gold Council (WGC) indicates notable decline in total gold supply. The recycled gold supply recorded decline despite higher prices. The fall in mine production, on account of coronavirus disruptions, too impacted supplies.

The total gold supply fell 4% during the quarter to 1,066t. The supplies hit the lowest level since Q2 2013. The mine production dropped by 3% when compared with the prior year quarter. Recycled gold supply totalled 280t in Q1, falling by 4% year-on-year to the lowest level in two years, WGC report noted.

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In accordance with provisional data by WGC, the mine production totalled 795.8t. This is the lowest Q1 mine production since 2015. Also, the year-on-year decline was the largest since Q1 2017. The quarterly mine production recorded fifth consecutive year of decline. China saw 12% year-on-year decline in mine output. Peru reported 17% year-on-year decline in production. Other key significant producing countries to witness decline were Argentina and South Africa, whose production were down by 13% and 11% respectively. On the other hand, gold mine production in Ecuador surged higher by 51%.

The physical exchange of gold for cash registered huge decline in the East Asia, Middle East and Southern Europe. The supply was impacted due to consumers choosing to hold on to their gold assets in anticipation of higher prices, in the midst of economic uncertainties caused by the virus