The global gold market saw a solid start to 2022 with first-quarter demand (excluding OTC) up 34% year-on-year, thanks to strong ETF flows, reflecting gold’s status as a safe-haven investment during times of geopolitical and economic uncertainty.
Geopolitical crises weighed heavily on the global economy and reinvigorated investor interest, pushing the gold price briefly to US$2,070/oz in March. The World Gold Council’s latest Gold Demand Trends Report reveals gold ETFs had their strongest quarterly inflows of 269t since Q3 2020. Gold bar and coin demand was 11% above its five-year average at 282t. However, renewed lockdowns in China and high prices in Turkey contributed to a 20% year-on-year decline.
Turning to the jewelry sector, global gold demand fell 7% year-on-year to 474t, driven primarily by softer demand in China and India. The demand for gold in technology hit a four-year high of 82t, up 1% on Q1 2021. Net buying by central banks more than doubled from the previous quarter, adding over 84t to official gold reserves during Q1 2022, with buying in the sector dominated by countries such as Egypt and Turkey. While 29% lower than Q1 2021, central banks continue to value gold’s performance during times of uncertainty. The total gold supply increased by 4% year-on-year. This was driven by strong mine production which hit 856t.
The Senior Analyst EMEA at the World Gold Council Louise Street said, “These global events and market conditions have solidified gold’s status as a safe haven holding, not just for investors but also for retail consumers thanks to its unique position as a dual-natured asset class.”
