Annual gold demand soars to a new decade high in 2022: WGC

The annual gold demand (excluding OTC) in 2022 increased by 18 per cent year-on-year, hitting 4,741 tonnes -- the highest annual total since 2011.

According to the World Gold Council’s latest Gold Demand Trends report, boosted by a record fourth quarter, demand for gold was propelled by hefty central bank buying and persistently strong retail investment.

Annual central bank demand more than doubled to 1,136 tonnes in 2022, up from 450 tonnes the year before and to a new 55-year record high. Purchases in Q4 2022 alone reached 417 tonnes, bringing the total for the second half of 2022 to more than 800 tonnes.

Investment demand (excluding OTC) in 2022 was up 10 per cent on the previous year. The increase was the result of two factors: a notable slowdown in ETF outflows and strong gold bar and coin demand.

Gold bars and coins continued to hold favour with investors in several countries around the world, which helped to offset weakness in China. Total European gold bar and coin investment for 2022 surpassed 300 tonnes, aided by persistently robust German demand. There was also significant growth in the Middle East, where annual demand increased by 42 per cent year-on-year.

Jewellery demand softened slightly in 2022, down 3 per cent at 2,086 tonnes.This weakness was largely driven by the marked drop in Chinese annual jewellery demand, down 15 per cent as consumer activity was curtailed by ongoing Covid-19 lockdowns for most of the year. The gold price rally in Q4 also contributed to the annual decline in jewellery demand.

Total annual supply in 2022 continued its gentle upwards trajectory, up by 2 per cent y-o-y to 4,755 tonnes and remaining above pre-pandemic levels. In particular, mine production increased to 3,612t – a four year high.

In a press statement, Louise Street, Senior Markets Analyst from the World Gold Council, commented: “Last year we saw the highest level of annual gold demand in over a decade, driven in part by colossal central bank demand for the safe haven asset. Gold’s diverse demand drivers played a balancing act as rising interest rates prompted some tactical ETF outflows while elevated inflation spurred on gold bar and coin investment. In the end, overall investment demand was up 10 per cent on the previous year.