Gold demand rose by 18 per cent in 2022 to an 11-year high of 4,741 tonnes, driven by retail investors and central banks shoring up their bullion reserves, according to the World Gold Council.
Annual central bank demand for gold more than doubled to 1,136 tonnes last year — its biggest yearly increase since 1967 — from 450 tonnes the year before, amid geopolitical uncertainty and high inflation, the WGC said in its annual report on Tuesday.
Among the central banks that bought gold last year were those in Turkey, China, Egypt and Qatar.
Investment demand for gold in 2022 was up 10 per cent from the previous year, the report said.
Retail investor demand was driven by a notable slowdown in exchange-traded fund (ETF) outflows and strong gold bar and coin demand, it added.
Brisk retail investment lifted bar and coin demand to a nine-year high. Strong growth in Europe, Turkey and the Middle East offset a sharp slowdown in China, where demand was dragged down by Covid-19-related factors, according to the WGC.
“Last year, we saw the highest level of annual gold demand in over a decade, driven in part by colossal central bank demand for the safe-haven asset,” said Louise Street, senior markets analyst at the WGC.
“Gold’s diverse demand drivers played a balancing act as rising interest rates prompted some tactical ETF outflows, while elevated inflation spurred on gold bar and coin investment.
“The need for wealth protection in the global inflationary environment remained a primary motive for gold investment purchases.”
A slowdown in US Federal Reserve interest rate increases is expected to boost the gold price.
Gold, which pays no interest, tends to benefit when interest rates are low as it reduces the opportunity cost of holding bullion.
Global economic growth is projected to rebound to 3.1 per cent in 2024, the International Monetary Fund said in its World Economic Outlook report released on Tuesday.
The IMF raised its global economic growth estimate for this year by 0.2 percentage points to 2.9 per cent from its October forecast, a slowdown from the 3.4 per cent expansion in 2022 and below the historical average of 3.8 per cent over the 2000-2019 period.
The fund said better economic data in the third quarter of last year, cooling inflation and the reopening of China point to resilience in the global economy.
Despite the revision, the Washington-based lender warned that the financial environment remained “fragile” as the fight against inflation is not over and will continue to weigh on the global economy, along with Russia’s war in Ukraine.
Meanwhile, global jewellery demand softened 3 per cent in 2022 to 2,086 tonnes, according to the WGC.
The weakness was driven by a drop in Chinese jewellery demand, which was down 15 per cent as consumer activity was curtailed by Covid-19 lockdowns for most of the year, the report said.
India, the world's second-biggest gold buyer, recorded a 2 per cent decline in gold jewellery demand in 2022, as a rally in local prices to near-record highs curtailed bullion demand during the key December quarter.
Jewellery demand in the Middle East was 15 per cent higher last year, with key contributions from the UAE and Saudi Arabia.
The gold price rally in the fourth quarter also contributed to the annual decline in jewellery demand, the WGC said.
The gold price hit a record annual average of $1,800 per ounce last year, despite facing headwinds from the strong US dollar and rising global interest rates.
Demand for gold in technology dropped by 7 per cent annually as deteriorating global economic conditions hampered demand for consumer electronics, the report said.
Total gold supply in 2022 was up by 2 per cent annually to 4,755 tonnes and remained above pre-pandemic levels. Mine production increased to 3,612 tonnes, hitting a four-year high.
“Turning to 2023, economic forecasts are pointing to a challenging environment and a likely global recession, which could lead to a role reversal in gold investment trends,” Ms Street said.
“If inflation comes down, this could be a headwind for gold bar and coin investment. Conversely, continued weakening of the US dollar and the moderating pace of interest rate hikes could have positive implications for gold-backed ETF demand.”
Jewellery consumption will remain resilient, bolstered by a release of pent-up demand as China reopens, she said.
However, it could be dragged down by a consumer spending squeeze if there is a more severe downturn.
UAE currency: the story behind the money in your pockets
The First Monday in May
Director: Andrew Rossi
Starring: Anna Wintour, Karl Lagerfeld, John Paul Gaultier, Rihanna
Three stars
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
Specs
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UAE gold medallists:
Omar Al Suweidi (46kg), Khaled Al Shehhi (50kg), Khalifa Humaid Al Kaabi (60kg), Omar Al Fadhli (62kg), Mohammed Ali Al Suweidi (66kg), Omar Ahmed Al Hosani (73), all in the U18’s, and Khalid Eskandar Al Blooshi (56kg) in the U21s.
UAE tour of the Netherlands
UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
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Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match
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The biog
Age: 59
From: Giza Governorate, Egypt
Family: A daughter, two sons and wife
Favourite tree: Ghaf
Runner up favourite tree: Frankincense
Favourite place on Sir Bani Yas Island: “I love all of Sir Bani Yas. Every spot of Sir Bani Yas, I love it.”
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- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
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- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Pad Man
Dir: R Balki
Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte
Three-and-a-half stars
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AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
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KILLING OF QASSEM SULEIMANI
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What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
