On January 31, the World ** Association released the "Global ** Demand Trend Report" for the whole year and the fourth quarter of 2023. According to the report, global ** demand (excluding OTC) in 2023 was 4,448t, down just 5% from 2022, when demand was strong. If over-the-counter markets and other **demand are taken into account, demand for the whole year of 2023 will reach 4,899 tonnes, a new record for the whole year. Demand in China has been strong in 2023, with a significant increase in not only official reserves, but also jewellery demand, ETF investment demand, and bar and coin demand.
The performance in 2023 has been impressive, with a surge against the trend against the backdrop of rapidly rising interest rates and economic recovery. The data shows that in 2023***15% to $2,078 an ounce, setting a record for the highest annual **. The average gold price in 2023 reached 1940$54 an ounce, 8% higher than in 2022 and a record high.
According to the World Association, the outperformance is largely due to global central bank demand, but rising geopolitical risks may also lead to investors' reluctance to give up, which is also a key driver of central bank demand. Developed markets saw interest rate-driven weakness, led by outflows from Europe's ** ETFs, but this was not enough to affect the performance of gold prices.
According to the report, global central bank buying interest remains high. Global central bank demand reached 1,037t in 2023, the second highest on record, but down 45t from 2022. Among them, the People's Bank of China increased its reserves by 225 tons for the whole year, including 44 tons in the fourth quarter. By the end of 2023, China's official ** reserves had reached 2,235 tonnes, accounting for 43%。
For the full year of 2023, total global bar and coin demand was down just 3% to 1,190t, with Chinese bar and coin demand up 28% y-o-y, offsetting a sharp 59% y-o-y decline in demand in Europe. Jewellery demand reached 2,093t in 2023, up slightly by 3t y-o-y. China is the most important growth driver: full-year consumer demand for gold jewellery in China reached 630t, up 10% on 2022 and offsetting a 6% decline in India over the same period, driven by the recovery of the Chinese economy, the growing attractiveness of the country to consumers seeking value preservation and the growth in demand for wedding jewellery.
In terms of ETF investment, global ETF** holdings fell by 244t last year, down 7% compared to 2022, or about US$15 billion. However, by the end of 2023, the total holdings of ETFs in the Chinese market were as high as 615 tons, with a total AUM of 29 billion yuan, a record high.
In addition, full-year demand in the technology sector fell 4% y-o-y to 298t in 2023, the lowest annual demand since the data began. However, in Q4 2023, technology gold recovered strongly, up 12% y-o-y to 81t.
For the whole of 2023, the global total volume reached 4,899 tons, an increase of 3% compared to the previous year. Of these**, it recorded a 9% year-on-year increase to 1,237 tonnes. Mine production reached 3,644t, up 1% y-o-y. However, given last year's high gold price, the increase was lower than expected.
Looking ahead, Wang Lixin, CEO of the World ** Association in China, said that domestic demand for gold bars and coins may continue to remain strong in 2024. Continued central bank purchases and underlying geopolitical and economic uncertainty are likely to continue to support bar and coin sales in 2024. However, given the high gold price and the potential for slower revenue growth, bar and coin sales in 2024 may not be on par with 2023.
Wang Lixin also pointed out that China's jewellery demand is likely to face challenges in 2024. "While the traditional peak season ahead of the Lunar New Year holiday may have contributed to strong Q1 jewellery demand, consumption throughout the year is likely to be challenged by the gold price**, slower economic growth and weaker demand for wedding gold. ”
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Text: Beijing Youth Daily reporter Cheng Jie.
Edited by Fan Hongwei.