Best Gold Demand Year 2022

2022 was the best gold demand year since 2012 with enormous purchases of central bank assisted by strong buying of retail investors and slower ETF outflows which increased the annual demand to an eleven year high. Annual gold demand (excluding OTC) jumped 18% to 4,741t, almost on a par with 2011, a time of exceptional investment demand. The strong full year total was aided by record Q4 demand of 1,337t. Jewellery consumption softened a frac-tion in 2022, down by 3% at 2,086t. Much of the weakness came through in the fourth quar-ter as the gold price surged. Investment demand (excluding OTC) reached 1,107t (+10%) in 2022. Demand for gold bars and coins grew 2% to 1,217t, while holdings of gold ETFs fell by a smaller amount than in 2021 (-110t vs. -189t), which further contributed to total investment growth.

Quarterly fluctuations in OTC demand largely netted out over the year. A second consecutive quarter of huge central bank demand (417t) took annual buying in the sector to a high of 1,136t, the majority of which was unreported.
Demand for gold in technology saw a sharp Q4 drop, resulting in a full-year decline of 7%. Deteriorating global economic conditions hampered demand for consumer electronics. Total annual gold supply increased by 2% in 2022, to 4,755t. Mine production inched up to a four-year high of 3,612t.

2022 saw a record annual average LBMA Gold Price PM of US$1,800/oz. The gold price closed the year with a marginal gain, despite facing notable headwinds from the strong US dollar and rising global interest rates. Although the Q4 average price was slightly weaker both q-o-q and y-o-y, a sharp November rally was followed by continued recovery through-out the closing weeks of the year.

Brisk retail investment lifted bar and coin demand to a nine year high. Strong growth in Eu-rope, Turkey and the Middle East offset a sharp slowdown in China, where demand was af-fected throughout the year by COVID-related factors.

Indian gold demand remained robust compared with longer term pre-pandemic levels. De-spite a fairly soft start to the year, Indian consumer demand recovered and only just fell shy of the strong levels of demand seen during 2021. Continued recovery from COVID-19 boost-ed yearly comparisons, although the sharp local price rally choked off demand in the closing weeks of December.

Total gold supply halted two years of successive declines in 2022, lifted by modest gains in all segments. Full-year mine production grew 1% but failed to match its 2018 peak. Annual recycling supply made only marginal gains, despite strong local currency price rises in many markets.