Gold demand struck its highest level since 2011 last year, boosted by soaring purchases from central banks and other investors seeking shelter from rocketing inflation, industry data showed Tuesday.
Demand for the precious metal, traditionally a haven investment in times of economic and geopolitical turmoil, rocketed almost a fifth to 4,740.7 tonnes in 2022 from the prior year, the World Gold Council (WGC) said.
Purchases from central banks more than doubled to reach 1,136 tonnes, the highest total for more than five decades, as the Ukraine war fuelled inflation.
“Gold is very much… a long-term store of value and the fact is it performs well in a time of crisis,” said WGC analyst Louise Street.
“If you consider what’s been happening in the backdrop of 2022, with geopolitics and rising inflation, those remain important drivers of demand.”
Gold jewellery demand softened slightly to 2,086 tonnes in the face of higher prices during the final quarter of 2022.
“Gold demand faces mixed prospects in 2023 but with upside potential,” the WGC added.
“Investment will likely be supported by elevated recession and geopolitical risks, and jewellery demand should benefit from continued recovery in China.
“Central bank buying could struggle to match 2022, however,” it cautioned.
The gold price had rebounded sharply in March 2022 in the wake of Russia’s invasion of Ukraine.
But the metal ended on a stable note to gain 1.25 percent in value over the course of the year.