Jewellery consumption plunged 39 per cent year on year in the first quarter of 2020 amid the continued onslaught of the coronavirus pandemic on global markets, according to the World Gold Council (WGC).

The council's latest Gold Demand Trends showed that jewellery demand dropped to a record low of 325.8 tonnes -- the worst quarterly total in WGC's series. The figure is also 42 per cent below the five-year quarterly average of 558.1 tonnes.

In value terms, global demand fell 26 per cent to US$16.6 billion, its lowest since the second quarter of 2010 after the global financial crisis.

Fears over the virus' effect on global markets also drove gold prices up, according to WGC.

Jewellery consumption in China, the largest jewellery market, likewise hit rock bottom, plummeting 65 per cent year on year to 64 tonnes in Q1.

"The Covid-19 outbreak, which took a meaningful hold in January, slashed jewellery demand to its lowest for more than 13 years," noted WGC. "In such circumstances, Chinese consumers prioritised expenditure on necessities rather than on recreational items such as gold jewellery." 

Jewellery demand in India meanwhile was down 41 per cent to an 11-year low of 73.9 tonnes, with Covid-19 compounding the impact of local economic and fiscal challenges. 

The wedding season boosted demand early in the quarter but a spike in local gold prices from mid-February slowed down demand as consumers held back on purchases. "Later in the quarter the market suffered as the lockdown took effect: Demand in March slumped by between 60-80 per cent," WGC said.

The impact of Covid-19 is seen to worsen in the second quarter as the lockdown extends into May. "This will impact gold demand during the key buying festival of Akshaya Tritiya, as well as wedding-related purchases," noted the council.