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Full-year gold demand (excluding over-the-counter transactions) in 2022 rose 18% year-on-year to 4,741 tonnes, the highest annual total since 2011. The Middle East also saw significant growth, with annual demand up 42% over the same period last year.
The World Gold Council’s latest Gold Demand Trends report shows demand for gold has been boosted by heavy central bank buying and continued strong retail investment, driven by a record fourth quarter.
The central bank’s annual demand more than doubled to 1,136 tonnes in 2022, up from 450 tonnes the year before and a 55-year high. Purchases in the fourth quarter of 2022 alone amounted to 417 tonnes, bringing the total purchases for the second half of 2022 to more than 800 tonnes.
investment needs
Investment demand (excluding OTC transactions) in 2022 is 10% higher than the previous year. The increase is the result of two factors: a marked slowdown in ETF outflows and strong demand for bars and coins.
Gold bars and coins continue to be favored by investors in several countries around the world, helping to offset weakness in China. European bar and coin investment totals more than 300 tonnes in 2022, driven by continued strong German demand.
Jewelery demand will moderate slightly in 2022, falling by 3% to 2,086 tonnes. The weakness was largely due to a significant drop in annual jewelery demand in China, which fell by 15%, as consumer activity was curtailed by the Covid-19 lockdown that lasted for much of the year. Higher gold prices in the fourth quarter also contributed to the annual decline in jewelery demand.
Total annual supply
Total annual supply in 2022 continued to rise modestly, up 2% year-on-year to 4,755 tonnes, and remained above pre-pandemic levels. In particular, mine production rose to a four-year high of 3,612 tonnes.
Louise Street, Senior Market Analyst at the World Gold Council, commented: “Last year we saw the highest level of annual gold demand in more than a decade, partly due to the huge appetite of central banks for safe-haven assets. Gold’s diverse demand drivers played out the balance As rising interest rates drove outflows from some tactical ETFs and rising inflation spurred investment in bars and coins, overall investment demand was up 10% over the previous year.
“Turning to 2023, economic forecasts point to a challenging environment and a possible global recession, which could lead to a reversal in the role of gold investment trends. If inflation falls, this could be negative for bar and coin investments. Conversely, the U.S. dollar continues to weaken And a slowdown in the pace of interest rate hikes could have a positive impact on demand for gold-backed ETFs. As China reopens and pent-up demand is unleashed, we could see jewelery consumption remain resilient; Could be dragged down by tightening consumer spending. While there are several possible outcomes, gold’s precedent of performing well in turbulent economic times underscores its value as a long-term strategic asset.” — trade arab news agency
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