Global demand for gold in 2022 reached its highest level since 2011, fueled by record purchases by central bankers, which more than doubled in a year, according to a report by the World Gold Council (CMO) published on Tuesday. Gold demand for full year 2022 was 4,740.7 tonnes, up 18% from 2021, driven by a strong fourth quarter.
In fact, these institutions scrambled to pan for gold during the year, with demand more than doubling in one year, reaching 1,135.7 tons in 2022 from 450.1 the year before. Gold is highly valued by central banks, which use it “as a long-term store of value,” particularly because it works well in times of crisis by serving as a bulwark against inflation, the analyst explains.
Gold bullion and coin purchases held up and continued to attract investors in several countries, offsetting weak demand from China. In total, investments in bars and coins amounted to 1,217.1 tons in 2022, compared to 1,190.9 in 2021.
The Covid effect in China
Lagging behind, the jewelry and technology sectors registered a slight fall in demand, respectively falling by 2 and 7% in the year (2,189.8 tons of jewelry and 308.5 tons of technology).
The slowdown in demand from the technology sector is mainly explained by the persistence of problems in the supply chain since the Covid-19 pandemic. And the global economic slowdown has weighed on consumer demand.
As for gold jewelry, the markets of India and China are capital. Traditionally, families take advantage of weddings and other celebrations to save part of their savings by transforming them into gold bars, necklaces, rings, bracelets and other objects, the safe haven par excellence.
But until December, China applied a very strict health policy, called “covid zero”, which imposed in particular widespread testing, strict monitoring of movements but also mandatory lockdowns and quarantines as soon as cases were discovered. The abandonment of this policy then caused a strong rebound in pollution. Result: demand for jewelry in China fell by 15% and investment in bars and coins by 24%.
Source: BFM TV
