Mining and recycling operations were curtailed nearly everywhere late in the March-quarter owing to widespread lockdown restrictions, resulting in a 3% year-on-year slide to the lowest production since 2015. It was also the largest year-on-year fall since the first quarter of 2017, however, the decline was "relatively modest" given the scale of the pandemic.

Gold production in China, South Africa and Peru was curtailed due to lockdown restrictions, which were somewhat offset by more consistent output in other regions that had experienced little or no disruption.

The WGC also reported a reduction in downstream capacity with a relatively few refiners halted operations, as well as challenges in transporting physical gold owing to fewer commercial flights.

Despite the supply and logistical issues, the WGC said overall liquidity in the gold market "remains robust which clearly highlights the strength of the gold market".

The pandemic had also increased investor uncertainty against the existing global backdrop of low and negative interest rates, as well as an anaemic growth outlook, which fuelled a surge in gold investment demand in the first quarter.

"We find that while gold's supply chain has not escaped unscathed, it has demonstrated resilience in the face of these challenges, highlighting a key strength of the market," the council said.

Gold's geographically diverse production profile acted as a double-edged sword; it ensured supply chain disruptions and conversely, also allowed the supply chain to demonstrate its resilience.

Recycling activity, which typically generates between 25-30% of gold supply, fell by 4% year-on-year to its lowest level in two years.

Travel restrictions resulted in fewer flights to get the metal to markets, meaning higher transport cost including chartering cargo-only aircraft.

The WGC underlined liquidity remained robust on haven investment demand. The existing global backdrop of low and negative interest rates, as well as an anaemic growth outlook, and the sudden COVID-19 shock took investor uncertainty to new highs and this fuelled a surge in investment demand, especially in Western markets such as the US and Europe.