Gold never loses its luster as evidenced by the steady production and high demand consistently recorded quarter after quarter. With annual demand consistently exceeding 3,500 tonnes, it reached 1,174 tonnes in the first three months of 2023 alone with prices now trading at US$1890 per ounce (28.349 grams).
The largest amounts of gold that are mined or recycled end up in jewelry, in bars (plates) and gold coins (gold pounds, dollars, etc.), in the vaults of more and more central banks around the world, but also in the manufacture of electronic and industrial products, in dental applications and in investments (data from the World Gold Council data).
The map of consumption
The gold consumption map detailed today by Τhe Liberal Globe, based on data from the World Gold Council, which is the official market development organization for the precious metal industry. It operates in all areas of the said industry, from gold mining to investment, with the aim of stimulating and maintaining the demand for gold.
Continued demand for gold purchases by central banks and a resurgence in consumer demand from China have so far offset the negative contribution of some investment classes and market weakness in India, data showed. Populous India – mainly – has traditionally recorded a high demand for gold since the precious metal is used, among other things, as a gift for weddings and other social events. Great demand is also recorded from China due to its large population.
Gold demand for the first quarter excluding so-called over-the-counter transactions was 13% lower year-on-year at 1,081 tonnes. Including the over-the-counter market – the so-called Over The Counter (OTC) transactions – total gold demand increased by 1% year-on-year to 1,174 tons.
Central banks are constantly buying gold
Of particular interest is the fact that demand from central banks showed a significant increase during the quarter. This shows that governments through their institutional institutions remained willing and committed buyers of gold, adding 228 tonnes to global reserves over the period, data from the World Gold Council show.
Investments in bullion and government gold coins increased by 5% year-on-year to 302 tonnes. In contrast, net negative demand for ETFs created a sharp decline compared to the significant inflows seen in Q1 2022.
Gold ETFs are commodity mutual funds that trade like stocks and have become a very popular form of investment. Although they consist of gold-backed assets, investors do not actually own the precious metal.
The jewelry
Global jewelry consumption remained almost flat at 478 tonnes for the first quarter of this year. Jewelery manufacturing outstripped consumption as the build-up of such stocks increased global stocks by 30 tonnes.
Gold use in the technology sector continued to be hit by the economic climate with demand falling by 70 tonnes.
Modest growth in both mine production (+2%) and recycling (+5%) led to a marginal increase in total Q1 2023 gold supply to 1,174 tonnes. The increase in recycling was largely a function of higher gold prices.
