Gold demand hits highest level in more than two years
Hyderabad: Demand for gold reached 1,147 tonnes in Q4 2021, its highest quarterly level since Q2 2019 and an increase of almost 50 per cent year-on-year, according to the World Gold Council. The World Gold Council’s latest Gold Demand Trends Report revealed that annual demand (excluding OTC markets) has recovered many of the Covid-induced losses […]
Hyderabad: Demand for gold reached 1,147 tonnes in Q4 2021, its highest quarterly level since Q2 2019 and an increase of almost 50 per cent year-on-year, according to the World Gold Council.
The World Gold Council’s latest Gold Demand Trends Report revealed that annual demand (excluding OTC markets) has recovered many of the Covid-induced losses from 2020 to reach 4,021 tonnes for the full year in 2021.
Gold bar and coin demand also rose 31 per cent to an eight-year high of 1,180 tonnes as retail investors sought a haven against the backdrop of rising inflation and ongoing economic uncertainty caused by the coronavirus pandemic.
Meanwhile, the World Gold Council’s data series reported outflows of 173 tonnes in 2021 from gold-backed ETFs as some more tactical investors reduced hedges early in the year amid Covid vaccine rollouts, while rising interest rates made holding gold more expensive.
In terms of annual consumer demand, the jewellery sector rebounded to match 2019’s pre-pandemic total of 2,124 tonnes. This was aided by a strong Q4 when demand reached its highest level since Q2 2013 – a quarter where the price of gold was 25 per cent lower than the average comparative price in 2021; further highlighting the strength of demand in the most recent quarter.
For the twelfth consecutive year, central banks were net purchasers of gold, adding 463 tonnes to their holdings, which was 82 per cent higher than 2020. A diverse group of central banks from both emerging and developed markets added to their gold reserves, lifting the global total to a near 30-year high.
The use of gold in the technology sector in 2021 increased nine per cent to reach a three-year high of 330 tonnes. While technology demand is smaller than other sectors, its uses are far reaching and prevalent in a variety of electronics, from mobile devices to the sophisticated James Webb telescope recently put in orbit.
Near term, the gold price will likely react to real rates, which in turn will respond to the speed at which global central banks tighten monetary policy and their effectiveness in controlling inflation.
Louise Street, Senior Analyst EMEA at the World Gold Council said, “Increasing rates fuelled a risk-on appetite among some investors, reflected in ETF outflows. 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 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.”
Now you can get handpicked stories from Telangana Today on Telegram everyday. Click the link to subscribe.
Click to follow Telangana Today Facebook page and Twitter .
