The global demand for gold has reached pre-pandemic levels as central banks snap up reserves, says the World Gold Council.
Demand in Q3 hit 1,181 tonnes, an increase of 28% year-on-year, the World Gold Council’s latest Gold Demand Trends report said.
“Despite a shaky macroeconomic environment, demand this year has reflected gold’s status as a safe haven asset, underscored by the fact that it has outperformed most asset classes in 2022,” said Louise Street, Senior Markets Analyst at the World Gold Council.
Gold surges amid economic woes
Despite global economic concerns the jewellery consumption to date saw a 10% year-on-year increase to 523 tonnes as consumers looked to what they consider a safe haven once again.
Much of this growth was spearheaded by India’s urban consumers who drove up demand 17% year-on-year to 146tonnes. Similarly impressive growth was also seen in much of the Middle East, with Saudi Arabian jewellery consumption up 20% since Q3 2021, and United Arab Emirates up 30% for the same period.
The World Gold Council Report said “Despite headwinds, gold continued to hold favour with retail investors who reacted to different market cues and turned to gold for its status as a store of value amidst rampant inflation and geopolitical uncertainty.
“Investors sought to hedge inflation with bar and coin investment, driving total retail demand up 36% year-on-year. This was supported by significant purchasing in Turkey (up more than fivefold year-on-year) and in Germany (up 25% year-on-year), but also from visible contributions across all major markets.”
Central bank-buying also picked up significantly with estimated record purchases of nearly 400 tonnes in the third quarter.
Central Bank of Turkey has proven to be the the largest reported buyer this year, adding a further 31 tonnes in the last quarter. Its reserves is now at 489 tonnes and year-to-date it has added 95 tonnes.
Louise Street said: “Looking ahead, we anticipate central bank buying and retail investment to remain strong and that could help offset potential declines in OTC and ETF investment that may prevail if the dollar strength persists.
“We also expect to see jewellery demand continue to perform strongly in some regions such as India and Southeast Asia, while the technology sector will likely witness further decline in the face of economic deceleration.”
Earlier this year falling prices saw Dubai attracting investors from India in search of discount prices.
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