Demand for gold reached its highest level since 2011 last year, boosted by purchases from central banks and other investors seeking protection from rocketing inflation, industry data showed on Tuesday.
Demand for the precious metal, which is usually an investment haven in times of economic and geopolitical turmoil, will rocket almost fivefold to 4,740.7 tonnes in 2022 from the previous year, the World Gold Council (WGC) said.
Purchases from the central bank more than doubled to 1,136 tonnes, the highest amount in more than five decades, as the Ukraine war fueled inflation.
Gold performs well in times of crisis
“Gold has so much … long-term store of value and has actually performed well in times of crisis,” said WGC analyst Louise Street.
“If you consider what is happening in the background of 2022, with geopolitics and rising inflation, it remains an important supporter of demand.”
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Demand for gold jewelery eased slightly to 2,086 tonnes due to higher prices during the last quarter of 2022.
“Gold demand faces a mixed outlook in 2023 but with upside potential,” the WGC added.
“Investment will be supported by recession and heightened geopolitical risks, and jewelry demand should benefit from the continued recovery in China.
“Central bank purchases may struggle to match 2022,” he said.
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The price rose sharply in March 2022 due to Russia’s attack on Ukraine.
But the metal finished on a stable note to gain 1.25 percent in value over the course of the year.