4741 tons! In 2022, global gold demand soared to the highest level in the past 11 years-FanMei Strategic Metal Resources Ltd.

Article | China Gold Daily reporter Wang Bei
This article is an original article of China Gold Net. The content is for reference only, and does not constitute operational suggestions or investment guidelines.

On January 31, the World Gold Association released the Global Gold Demand Trend Report, which showed that the annual gold demand (excluding OTC trading) in 2022 increased by 18% to 4741 tons year-on-year, which was the highest annual total demand since 2011; The demand for gold in the fourth quarter of 2022 also reached a new high of 1337 tons.

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Wang Lixin, CEO of the World Gold Association in China, analyzed that under the multiple effects of central banks' strong buying of gold, individual investors' strong buying and the slowdown of gold ETF (exchange traded fund) outflow, gold demand in 2022 rose to the highest level in 11 years.

In 2022, the global central bank's annual demand for gold purchase reached 1136 tons, more than double the 450 tons in 2021 and hit a new high in 55 years. In the fourth quarter of 2022 alone, global central banks purchased 417 tons of gold, which was the second consecutive quarter at a high level. The total amount of gold purchased in the second half of 2022 also exceeded 800 tons.
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In 2022, the global gold investment demand (excluding OTC trading) will reach 1107 tons, an increase of 10% over 2021. Among them, the demand for gold bars and coins increased by 2% to 1217 tons, the highest in 9 years; The gold ETF position decreased by 110 tons, which was narrower than that in 2021 (189 tons in 2021). The quarterly fluctuations of OTC investment demand in 2022 basically offset each other.

In the fourth quarter of 2022, the global gold ETF outflow totaled 90 tons. Compared with the outflow of 23 tons in the fourth quarter of 2021, the gold ETF outflow increased significantly.

In the fourth quarter of 2022, the total demand for gold bars and coins was 335 tons, up 3% year on year.
In 2022, gold bars and coins continued to be favored by investors in several countries around the world, making up for China's declining demand for gold investment. Driven by the continuous strengthening of German demand, the total investment in gold bars and coins in Europe will exceed 300 tons in 2022. On the other hand, the Middle East region also achieved substantial growth, with the demand rising 42% year-on-year in 2022.
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In 2022, the global demand for gold jewellery was slightly weak, down 3% to 2086 tons; Gold jewellery consumption in the fourth quarter was 629 tons, down 13% year on year. The soaring price of gold in the fourth quarter of 2022 put pressure on the demand for gold jewellery. At the same time, China, a major gold consumer in the world, has affected its consumption this year due to epidemic related factors, resulting in a 15% decline in China's gold jewellery demand in 2022. This will have an impact on the global demand for gold jewellery in 2022.
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In 2022, the global demand for science and technology gold dropped by 7%, and the demand for science and technology gold in the fourth quarter was 72 tons, down 16% year on year.
In 2022, the global total annual gold supply will increase by 2% to 4755 tons, which will remain above the pre-epidemic level; The total supply in the fourth quarter was 1217 tons, down 1% year on year. It is noteworthy that in 2022, the output of gold mines reached a new high in four years, increasing to 3612 tons. In the fourth quarter, the output of gold mines reached 925 tons, down 2% year on year.
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In 2022, the total gold supply finally stopped the decline for two consecutive years, and all sectors achieved a small increase. The annual gold output increased by 1%, but failed to match the peak in 2018. Although the price of gold in local currency in many countries and regions has risen strongly, the annual supply of recovered gold has only increased slightly.
Looking forward to 2023, Louise Street, senior market analyst at the World Gold Council, said: "The economic forecast shows that the general environment will be quite challenging, and the global economy may decline, which may have different effects on different sectors of gold investment. The fall of inflation rate may have adverse effects on gold bar and gold coin investment; on the contrary, the continued weakening of the US dollar and the slowing pace of interest rate increase may play a positive role in the demand for gold ETFs. The reopening of the Chinese market is expected to see the 'pent-up' demand released, from The consumption of gold ornaments will remain resilient; However, if there is more obvious downward pressure on the economy, the demand for gold jewellery consumption may also be dragged down by the squeeze of consumer spending. Despite the above possibilities, gold has demonstrated its value as a long-term strategic asset by virtue of its good performance in times of economic turbulence. "
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