Global demand for gold fell in the last three months of last year as sales of gold jewellery, bars and coins declined alongside purchases by central banks and financial investors, an industry report said on Thursday.
Central banks and investors had bought large amounts of gold earlier in the year, helping push gold prices up 18% in 2019 to the highest level since 2013.
Gold is often seen by investors as a safe investment during times of political and economic uncertainty and becomes more popular when interest rates fall, as they did last year.
Higher prices, however, caused some buyers “ particularly retail consumers in top markets China and India - to reduce their purchases, the Refinitiv GFMS Gold Survey said.
Total physical demand for gold over October-December was 1,033 tonnes, down 9% from the same period in 2018, it said.
Fabrication of gold jewellery fell 9% year-on-year in the fourth quarter to 509 tonnes, retail purchases of bars and coins were down 7% at 297 tonnes and central bank buying was 18% lower at 132 tonnes, according to the report.
Exchange-traded products holding gold on behalf of financial investors - which Refinitiv GFMS does not classify as physical demand - added 35 tonnes to their inventories, compared with 110 tonnes of additions in October-December 2018.
On the other side of the market, supply dipped 2% year-on-year in the fourth quarter to 1,185 tonnes, the report said.
"While demand from key Asian markets will likely remain weak this year, ongoing central bank purchases and renewed investor interest will lend support for higher gold prices," Refinitiv GFMS analysts said.
"We therefore expect gold to average $1,558/oz in 2020, with a possibility to test and move beyond $1,700/oz later in the year."