The Covid-19 pandemic has disrupted the gold supply chain unlike any other event in modern history, the World Gold Council (WGC) said in a market update on May 28.
With all elements of the chain affected, from mining operations to consumption, this has resulted in some distortions within parts of the market but it has also “allowed the supply chain to demonstrate its resilience”.
Both gold mining and recycling activities were curtailed owing to lockdown restrictions in the first quarter of the year, but these declines were “modest” in comparison to the scale of disruption to other industries globally, the WGC noted.
The council also reported a reduction in downstream capacity with a small number of refiners halting operations, as well as challenges in transporting physical gold owing to fewer commercial flights.
However, despite all the supply and logistical issues, the council said overall liquidity in the gold market “remains robust which clearly highlights the strength of the gold market”.
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