Global gold demand excluding over-the-counter (OTC) trading fell by 5 percent to 4,448.4 metric tons in 2023 but remained strong compared with a 10-year average due to geopolitical and economic uncertainty, according to the World Gold Council (WGC).
Ongoing conflicts, trade tensions and over 60 elections taking place around the world are likely to support demand this year and compensate for a potential hit to jewellery purchases amid high prices and economic slowdown. Including demand from the OTC markets and other sources, total demand climbed by 3 per cent to a new annual record at 4,898.8 tonnes and supported the growth of the 2023 average gold price to a record high of $1,940.54, as per WGC in its quarterly demand trends report.
Gold prices hit a record $2,135.4 per troy ounce in December and have held above the $2,000 psychological level so far this year. The latest Reuters poll expected the precious metal to average $2,053.5 an ounce in 2024. As the central bank buying streak continued on from 2022 at a blistering rate, demand from this sector reached 1,037.4 tonnes in 2023, down 4 per cent from the 2022 record year.
Purchases from central banks are expected to slow down by around 200 tonnes in 2024 but remain higher than prior to 2022, adding that it was a conservative scenario, and that demand could speed up.In 2023, jewellery consumption was steady at 2,092.6 tonnes due to 17 per cent post-COVID increase in demand in China and despite high gold prices, the WGC said.
Buying of gold bars and coins fell by 3 per cent as European demand continued to plummet, while outflows from exchange traded funds (ETFs) storing bullion for investors continued for the third consecutive year with 244.4 tonnes of decline, it added.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
