Gold in 2022 saw its strongest annual demand in more than a decade, report finds

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This story has been updated to reflect the World Gold Council correction in its report published on 31 January. Reports now say that central bank gold demand is set to hit a record high in 2022. Earlier, the report said that 2022 central bank gold demand was the highest and the second highest on record.

Annual global gold demand last year hit its highest level since 2011 on the back of record demand for the precious metal in the fourth quarter and the strongest gold demand among central banks since 1967, according to a report released Tuesday by the World Gold Council. But reached

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According to the Full Year 2022 Gold Demand Trends report, total global demand climbed 18% to 4,740.7 MT in 2022, excluding over-the-counter trading, which marked its 30th anniversary. OTC trading is done directly between dealers without the supervision of the exchange.

The report said that global gold demand in 2022 was the highest since 2011, when global demand, excluding OTC trading, totaled 4,764.4 MT. The fourth quarter of 2022 saw a record demand of 1,337 MT.

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Investment demand reached 1,107 MT last year, up 10% from the year before. Under that category, bar and coin demand rose 2% year over year to 1,217 metric tons, while holdings of physically-backed gold exchange-traded funds rose 110 metric tons, or 3% year over year, the report said. declined. The World Gold Council said this equated to an outflow of $3 billion.

Nevertheless, last year saw central bank demand rise for a second year-on-year, taking annual purchases among central banks to a record high of 1,136 metric tons, it said, mainly from emerging markets such as Turkey. With purchases from banks of and China.

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“Annual central bank demand more than doubled to 1,136 [metric tons] in 2022, above 450 [metric tons] year ago and at a record high,” the report said.

“Gold’s steady performance in 2022, despite strong headwinds from rising rates and a strong dollar for most of the year, has rekindled investor interest,” the report said, and as investors “looked at interest rates, have settled the potential peak level, the rate will increase.” reduce one problem.

The World Gold Council said that continued weakness in the US dollar, rising recession risks, a persistently high bond-equity correlation and elevated geopolitical risks “form the backbone of a positive strategic case for gold in 2023.”

Central-bank demand, meanwhile, remains “difficult to forecast” partly because this policy may operate, but the World Gold Council said that “the slow pace of growth in total reserves is likely to put pressure on some central banks”. This is likely to reduce their ability to allocate. to gold. Given this, it believes that 2023 central bank purchases will be “more moderate”.

Based on the most active contract GC00,
Gold futures trading on Comex ended 2022 with a slight decline of 0.1%, according to Dow Jones market data. Tuesday’s most active April contract GCJ23,
It closed at $1,884.80 an ounce, up $5.30, or 0.3%, for the session.

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