Geopolitical and economic uncertainty bolster gold demand and prices in 2023

Date Posted:Wed, 31st Jan 2024

Geopolitical and economic uncertainty bolster gold demand and prices in 2023

The World Gold Council has released its annual Gold Demand Trends report. The report reveals that annual gold demand (excluding OTC) fell to 4,448t in 2023, down just 5% from a notably strong 2022. When factoring in demand from the OTC markets and other sources, total demand climbed to a new annual record of 4,899t. Investment from this more opaque source of demand supported 2023’s highest annual average gold price on record.

 

Gold is a unique asset because of the diverse sources of demand and use cases. Approximately 40% of annual demand comes from the jewelry sector, which is dominated by China, India, and the Middle East. Investment demand accounts for a similar proportion, and it was outflows from global ETFs and a softening of retail bar and coin demand that led to a drop in gold demand last year (excluding OTC). The big story is central banks though. Accounting for on average 18% of the annual demand for gold, central bank buying was the second highest on record.

Gold is also used in technology – in particular, it is valued for its high melting point, excellent conductivity, and robustness. It is used in high-end electronics, medical devices, and emerging technologies many of which are supporting the energy transition.

The latest report can be found here: https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2023

About the World Gold Council

The WGC is the global authority on gold. Based in the UK and with offices around the world including here in Dubai, the WGC has a broad remit including setting global standards, research, outreach to investors, and working to improve market integrity and access. London is at the centre of the gold market, with most of the world’s trading of gold taking place there. The UAE is also a key centre, and is the fourth largest importer and exporter of gold in the world after the UK, Switzerland, and China.

Andrew Naylor, Head of Middle East and Public Policy, relocated from Singapore to Dubai last year to establish the Council’s regional office. For more information about the gold market, or the role of the World Gold Council, please email andrew.naylor@gold.org