Olivier Le Moal
2022: strongest year for gold demand in over a decade
Colossal central bank purchases, aided by vigorous retail investor buying and slower ETF outflows, lifted annual demand to an 11-year high.
Annual gold demand (excluding OTC) jumped 18% to 4,741t, almost on par with 2011 – a time of exceptional investment demand. The strong full-year total was aided by record Q4 demand of 1,337t.
Jewellery consumption softened a fraction in 2022, down by 3% at 2,086t. Much of the weakness came through in the fourth quarter as the gold price surged.
Investment demand (excluding OTC) reached 1,107t (+10%) in 2022. Demand for gold bars and coins grew 2% to 1,217t, while holdings of gold ETFs fell by a smaller amount than in 2021 (-110t vs. -189t), which further contributed to total investment growth. Quarterly fluctuations in OTC demand largely netted out over the year.
A second consecutive quarter of huge central bank demand (417t) took annual buying in the sector to a 55-year high of 1,136t, the majority of which was unreported.
Demand for gold in technology saw a sharp Q4 drop, resulting in a full-year decline of 7%. Deteriorating global economic conditions hampered demand for consumer electronics.
Total annual gold supply increased by 2% in 2022, to 4,755t. Mine production inched up to a four-year high of 3,612t.
2022 gold demand almost matched the 2011 record
Data to 31 December 2022. (Sources: Metals Focus, Refinitiv GFMS, World Gold Council)
Highlights
2022 saw a record annual average LBMA Gold Price PM of US$1,800/oz. The gold price closed the year with a marginal gain, despite facing notable headwinds from the strong US dollar and rising global interest rates. Although the Q4 average price was slightly weaker both q-o-q and y-o-y, a sharp November rally was followed by continued recovery throughout the closing weeks of the year.
Brisk retail investment lifted bar and coin demand to a nine-year high. Strong growth in Europe, Turkey, and the Middle East offset a sharp slowdown in China, where demand was affected throughout the year by COVID-related factors.
Indian gold demand remained robust compared with longer-term pre-pandemic levels. Despite a fairly soft start to the year, Indian consumer demand recovered and only just fell shy of the strong levels of demand seen during 2021. Continued recovery from COVID-19 boosted yearly comparisons, although the sharp local price rally choked off demand in the closing weeks of December.
Total gold supply halted two years of successive declines in 2022, lifted by modest gains in all segments. Full-year mine production grew 1% but failed to match its 2018 peak. Annual recycling supply made only marginal gains, despite strong local currency price rises in many markets.
Disclaimer
Copyright and other rights
© 2023 World Gold Council. All rights reserved. World Gold Council and the Circle device are trademarks of the World Gold Council or its affiliates.
Any references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced. All third-party content is the intellectual property of the respective third party and all rights are reserved to such party.
Reproduction or redistribution of any of this information is expressly prohibited without the prior written consent of World Gold Council or the appropriate intellectual property owners, except as specifically provided below.
Use of any statistics in this information is permitted for the purposes of review and commentary in line with fair industry practice, subject to the following pre-conditions: (i) only limited extracts may be used; and (ii) any use must be accompanied by a citation to World Gold Council and, where appropriate, to Metals Focus, Refinitiv GFMS, or other identified third party, as their source.
World Gold Council does not guarantee the accuracy or completeness of any information and does not accept responsibility for any losses or damages arising directly or indirectly from the use of this information.
This information is not a recommendation or an offer for the purchase or sale of gold or any products, services, or securities.
This information contains forward-looking statements which are based on current expectations and are subject to change. Forward-looking statements involve a number of risks and uncertainties. There is no assurance that any forward-looking statements will be achieved.
Information regarding QaurumSM and the Gold Valuation Framework
Note that the resulting performance of various investment outcomes that can generated through use of Qaurum, the Gold Valuation Framework and other information are hypothetical in nature, may not reflect actual investment results and are not guarantees of future results. Neither WGC nor Oxford Economics provides any warranty or guarantee regarding the functionality of the tool, including without limitation any projections, estimates or calculations.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
Be the first to comment