Geopolitical tensions and the weakened state of the Chinese economy drove global gold demand to reach record levels last year, as reported by the World Gold Council (WGC).
The total gold demand reached an unprecedented 4,899 tons in 2023, marking a 3% increase of 158 tons compared to 2022, according to the WGC’s Gold Demand Trends Full Year 2023 report.
The surge in demand was primarily fueled by robust activity in the opaque over-the-counter (OTC) market and sustained purchases by central banks, the report said.
It noted that the People’s Bank of China emerged as the largest buyer of 225 tons of gold last year, thereby increasing its reserves to 2,235 tons.
The heightened demand from both central banks and retail investors, with the former’s gold purchase exceeding 1,000 tons for the second consecutive years, resulted in a peak gold price of $2,100 per ounce last December, according to CNBC.
Major drivers of gold demand in 2023 were the Russia-Ukraine conflict, Israel-Hamas tensions, and the economic slowdown in China, according to WGC’s report.
Significant acquisitions of gold by central banks can also impact investors by raising their awareness of the asset and, in some cases, prompting individuals to consider it as a personal investment.
Looking ahead to this year, the council anticipates that gold purchases may not reach the levels seen in the previous year, but a potential decline in inflation could prevent a significant drop in demand.
In contrast, Vietnam’s gold demand slid 6% to 55.5 tons last year from 59.1 tons in 2022
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