Global gold demand rose 10 per cent in 2021 to 4,021 tonnes, recouping much of the coronavirus-induced losses sustained in 2020.
The growth was driven by a surge in jewellery purchases and central banks, which shored up their bullion reserves, according to the World Gold Council.
However, investment demand was mixed as high inflation competed with rising yields for investor attention, the WGC said in its annual report on Friday.
“On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand. Increasing rates fuelled a risk-on appetite among some investors, reflected in ETF outflows,” said Louise Street, senior analyst for Europe, the Middle East and Africa at the World Gold Council.
“On the other hand, a search for safe-haven assets led to a rise in gold bar and coin purchases, buoyed by central bank buying. Declines in ETFs [exchange-traded funds] were offset by demand growth in other sectors.
“Jewellery reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy.”
In 2020, the Covid-19 pandemic hammered jewellery sales, forcing investors to stockpile as they sought a safe place to store wealth. That trend reversed as economic growth rebounded, boosting consumer spending and weakening investor appetite.
In the fourth quarter of 2021, gold demand jumped 50 per cent a year to 1,147 tonnes, its highest quarterly level since the period from April to June 2019. This was due to a rise in jewellery purchases at the end of the year, according to the WGC.
Jewellery fabrication made a solid recovery in 2021, growing 67 per cent to 2,221 tonnes — the highest since 2018 — to meet the strong rebound in consumer demand for jewellery.
Jewellery sales grew 52 per cent to 2,124 tonnes in 2021, matching the total in 2019. This was partly due to fourth-quarter demand, which — at 713 tonnes — was the strongest three-month consumption since the second quarter of 2013.
“India was a key driver in the fourth quarter but jewellery demand in markets across the globe — almost without exception — was stronger year-on-year”, the WGC said.
“Continued economic recovery and, crucially, the less widespread use of strict lockdown measures to contain Covid, were key reasons.”
Indian gold jewellery demand almost doubled annually in 2021, surging past pre-pandemic levels to hit a six-year high of 611 tonnes. Record quarterly demand of 265 tonnes in the fourth quarter sealed the “remarkable” annual performance, the council said.
Markets in the Middle East all registered significant double-digit annual growth in demand for jewellery in 2021.
The UAE led with a 57 per cent increase in annual demand to 34 tonnes. This was due to the continued improvement in tourist numbers, especially from India and the effective containment of Covid-19 that boosted local demand, the WGC said.
Central banks accumulated 463 tonnes of gold in 2021, an 82 per cent increase from 2020, to lift global reserves to close to a 30-year high.
However, the pace of buying slowed in the second half, falling 22 per cent in the fourth quarter. A diverse group of central banks in both emerging and developed markets added to their gold reserves.
Thailand, which last added to its gold reserves in 2017, was the largest buyer in 2021, the WGC said.
According to data from the International Monetary Fund, central bank gold reserves around the world rose to about 35,600 tonnes in 2021, the highest level since 1992.
Jewellery reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy
Louise Street,
senior analyst for Europe, Middle East and Africa, World Gold Council
Gold bar and coin demand rose 31 per cent to an eight-year high of 1,180 tonnes as retail investors sought a safe haven against the backdrop of rising inflation and continued economic uncertainty caused by the pandemic, the WGC said.
The Middle East registered a third consecutive decline in annual bar and coin demand, down 4 per cent to 55 tonnes. The decline was driven solely by Iran, where high inflation and rising housing costs continued to sap demand, which fell 30 per cent to 25 tonnes.
In contrast, demand across the rest of the region was strong. The UAE jumped to eight tonnes, the highest level since 2015.
In 2021, investors in gold-backed exchange-traded funds sold more bullion than they bought, weakening overall demand.
Global holdings of gold ETFs fell by 173 tonnes in 2021, in sharp contrast to 2020's record 874-tonne increase.
“Interest rates, representing the opportunity cost for holding gold, are historically a key determinant of ETF flows and last year was no exception,” the council said.
Gold prices ended 2021 about 4 per cent lower. They closed the year at $1,806 an ounce, falling from record highs above $2,000 an ounce during the investment frenzy in 2020.
Looking ahead at 2022, investment in gold “may face challenges from rising rates, and the recent strong increase in bar and coin demand may be an additional headwind to further growth", the WGC said.
It expects persistently high inflation and equity market pullbacks to be supportive.
Demand for jewellery in 2022 should benefit from weaker prices with good underlying economic growth. Central banks are expected to continue buying gold, although at a slower pace than in 2021, it said.
“How central banks deal with persistent high levels of inflation will be a key factor for institutional and retail demand in 2022,” Ms Street said.
“Meanwhile, the jewellery market’s current strength could be hampered if new Covid variants restrict consumer access again or continue if the economic recovery endures.”
UAE currency: the story behind the money in your pockets
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019
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LEADERBOARD
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Chef Nobu's advice for eating sushi
“One mistake people always make is adding extra wasabi. There is no need for this, because it should already be there between the rice and the fish.
“When eating nigiri, you must dip the fish – not the rice – in soy sauce, otherwise the rice will collapse. Also, don’t use too much soy sauce or it will make you thirsty. For sushi rolls, dip a little of the rice-covered roll lightly in soy sauce and eat in one bite.
“Chopsticks are acceptable, but really, I recommend using your fingers for sushi. Do use chopsticks for sashimi, though.
“The ginger should be eaten separately as a palette cleanser and used to clear the mouth when switching between different pieces of fish.”
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
PSL FINAL
Multan Sultans v Peshawar Zalmi
8pm, Thursday
Zayed Cricket Stadium, Abu Dhabi
RESULTS
6.30pm Al Maktoum Challenge Round-2 – Group 1 (PA) $49,000 (Dirt) 1,900m
Winner RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
7.05pm Al Bastakiya Trial – Conditions (TB) $50,000 (D) 1,900m
Winner El Patriota, Vagner Leal, Antonio Cintra
7.40pm Zabeel Turf – Listed (TB) $88,000 (Turf) 2,000m
Winner Ya Hayati, Mickael Barzalona, Charlie Appleby
8.15pm Cape Verdi – Group 2 (TB) $163,000 (T) 1,600m
Winner Althiqa, James Doyle, Charlie Appleby
8.50pm UAE 1000 Guineas – Listed (TB) $125,000 (D) 1,600m
Winner Soft Whisper, Frankie Dettori, Saeed bin Suroor
9.25pm Handicap (TB) $68,000 (T) 1,600m
Winner Bedouin’s Story, Frankie Dettori, Saeed bin Suroor
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
PSG's line up
GK: Alphonse Areola (youth academy)
Defence - RB: Dani Alves (free transfer); CB: Marquinhos (€31.4 million); CB: Thiago Silva (€42m); LB: Layvin Kurzawa (€23m)
Midfield - Angel di Maria (€47m); Adrien Rabiot (youth academy); Marco Verratti (€12m)
Forwards - Neymar (€222m); Edinson Cavani (€63m); Kylian Mbappe (initial: loan; to buy: €180m)
Total cost: €440.4m (€620.4m if Mbappe makes permanent move)
ESSENTIALS
The flights
Emirates flies direct from Dubai to Rio de Janeiro from Dh7,000 return including taxes. Avianca fliles from Rio to Cusco via Lima from $399 (Dhxx) return including taxes.
The trip
From US$1,830 per deluxe cabin, twin share, for the one-night Spirit of the Water itinerary and US$4,630 per deluxe cabin for the Peruvian Highlands itinerary, inclusive of meals, and beverages. Surcharges apply for some excursions.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
Meghan%20podcast
%3Cp%3EMeghan%20Markle%2C%20the%20wife%20of%20Prince%20Harry%2C%20launched%20her%20long-awaited%20podcast%20Tuesday%2C%20with%20tennis%20megastar%20Serena%20Williams%20as%20the%20first%20guest.%3C%2Fp%3E%0A%3Cp%3EThe%20Duchess%20of%20Sussex%20said%20the%2012-part%20series%2C%20called%20%22Archetypes%2C%22%20--%20a%20play%20on%20the%20name%20of%20the%20couple's%20oldest%20child%2C%20Archie%20--%20would%20explore%20the%20female%20experience.%3C%2Fp%3E%0A%3Cp%3ELast%20year%20the%20couple%20told%20Oprah%20Winfrey%20that%20life%20inside%20%22The%20Firm%22%20had%20been%20miserable%2C%20and%20that%20they%20had%20experienced%20racism.%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%22I%20don't%20ever%20remember%20personally%20feeling%20the%20negative%20connotation%20behind%20the%20word%20ambitious%2C%20until%20I%20started%20dating%20my%20now-husband%2C%22%20she%20told%20the%20tennis%20champion.%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A
Killing of Qassem Suleimani
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
