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The London-based firm said physical demand plunged to 753 tonnes in the March quarter, its lowest level since 2009.
Gold was priced at about US$1687/oz today, or A$2612/oz.
Jewellery demand, which typically accounts for around 55% of total physical demand, recorded severe losses in the three months to March 31, slumping 40% on a year-on-year basis, Refinitiv said.
Jewellery demand is dominated in Asia. Demand in China, where COVID-19 emerged, recorded a precipitous 62% decline. Demand in India had started to slide due to higher prices before the government mandated lockdown in late March all but wiped out retail activity, with fabrication demand for the quarter plummeting 34% from 2019 levels.
Investment demand was also mixed.
World Gold Council figures overnight reported an 80% year-on-year rise in first-quarter investment demand to almost 540t for the quarter and estimated total global first-quarter gold demand of 982t.
Exchange-traded fund investors used the late March gold price correction to buy up, adding 300t to increase EFT holdings to a fresh high of over 3000t by the end of the quarter.
Retail investment interest cooled, falling 11%, as the high prices discouraged buying,
Investment demand in Asia fell 67%, however there was a surge in safe-haven demand in the west, where gold bar demand more than double in Europe and up 21% in North America.
Demand for gold used in industrial applications was estimated to be down by 19%, Refinitiv said.
Refinitiv precious metals research manager Cameron Alexander warned the bad news could continue, with the yellow metal vulnerable to economic deterioration in the west, and another equity market meltdown, which could see assets liquidated, including gold.
"Having said that, with heightened uncertainty and expectations of the global economic recession, unprecedented levels of stimulus from central banks around the world and interest rates remaining at historically low levels and in negative territories, we believe that gold will rebound to even higher levels," Alexander said.
"We forecast gold to average US$1637/oz in 2020, with a possibility to test and move beyond $1800/oz later in the year."
Last month Bank of America lifted its 18-month target price
for gold to a record $3000/oz, with an average of $1695/oz in 2020 and $2063/oz in 2021. Goldman Sachs estimates suggested gold could average $1600/oz in 2020 and could reach $1800/oz in early 2021.
On the supply side, mine production increased 3% year-on-year to an estimated 842t, Refinitiv reported, however McKinsey & Co told last month's World Gold Forum 2020
that COVID-19 was impacting about 10Moz of gold production due to shutdowns and slowdowns, and costs of production could rise 5-15%.
That could exacerbate high-grading of deposits, which could lead to even lower production in the future.
According to Surbiton Associates, Australian gold production reached a record of 325t last year, with a record 87t in the December quarter as new mines came online.