Report shows central-bank purchasing extravaganza driving request on gold

(MENAFN) In a year marked by global uncertainty, central banks played a pivotal role in propelling total gold demand to an unprecedented high of 4,899 tons in 2023, according to the World Gold Council's (WGC) Gold Demand Trends report. The report revealed that central bank purchases maintained a "breakneck pace," reaching 1,037 tons, nearly matching the record set in 2022.

John Reade, a market strategist at the WGC, described the central bank purchases as "not as strong as 2022 but substantially higher than prior to 2022, exceeding expectations." Despite an anticipated slowdown of around 200 tons in central bank purchases for 2024, Reade suggested that the demand for gold among central banks could actually accelerate.

The report highlighted that global gold jewelry consumption remained steady at 2,092 tons in 2023, with a notable 17 percent post-Covid surge in demand in China, despite elevated gold prices. However, purchases of gold bars and coins experienced a 3 percent decline, primarily driven by a continued decrease in European demand. Additionally, global gold exchange-traded funds (ETFs) witnessed a third consecutive annual outflow, shedding 244 tons in 2023.

While the annual mine production increased to 3,644 tons, it fell short of the 2018 record. The WGC's report underscores the multifaceted dynamics influencing the gold market, with central banks emerging as key players influencing the trajectory of total gold demand. As central bank buying maintains momentum, the report offers insights into the shifting landscape of gold consumption across different sectors, reflecting the complex interplay of global economic conditions and geopolitical factors.
 

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