According to the World Gold Council's Global Gold Demand Trends Report, gold demand rose to its highest level in nearly 11 years in 2022.。Based on data analysis and professional insight into all dimensions of the gold market, this is the result of multiple actions such as heavy gold purchases by central banks, strong buying by individual investors and slowing gold ETF outflows.。The World Gold Council believes that the potential for gold demand to rise in 2023 outweighs the downside risk, and gold investment is expected to grow in 2023, with ETF and over-the-counter (OTC) demand likely to take the baton from gold bars and coins.。

Full Year Outlook

We released our gold outlook for 2023 in December, and the data in this Q4 2022 Global Gold Demand Trends report (and available YTD data) is consistent with the outlook's core scenario.。Due to the growing risk of recession in the US and Europe, we still believe that the upside potential of gold demand in 2023 outweighs the downside risk。

Expected change in annual demand in 2023 compared to 2022 *

* Data as of December 31, 2022。Manufacturing needs include gold jewelry and technology gold needs.。Investments include gold ETFs, bullion and gold coins, and over-the-counter trading needs。Gold supply includes gold mine production and gold recovery。We ignore the need for hedging, assuming that the term does not change.。

Source: World Gold Council

Investment

The outlook for 2023 is good.

Gold investment is expected to grow in 2023, with ETF and over-the-counter (OTC) demand likely to take the baton from gold bars and coins。

Gold retail investment continues to be healthy, but it is still likely to decline as inflation concerns in Western markets begin to fade。

Asia's personal gold investment is expected to see strong growth。

Subdued demand for gold ETFs and OTC trading in 2022 is likely to set the stage for a modest recovery in gold investment in 2023。Rising interest rates and a stronger dollar both pose significant hurdles to investing in gold in 2022, but gold's performance remained firm for most of the year and rekindled investor interest.。As investors identify possible interest rate peaks, rate hikes will no longer pose a significant threat to gold investments。In addition, we believe that the continued weakness of the US dollar, the increased risk of recession, the increasing correlation between the bond market and the stock market, and the intensification of geopolitical risks are likely to maintain investors' interest in gold, driving investors to adopt an active investment strategy for gold in 2023, so that this year's gold investment will show upward potential over time.。

Inflation is likely to continue to decline in 2023。However, we believe that lower inflation will do more harm than good to retail gold bar and coin investment compared to institutional investment demand.。As we noted in our last Global Gold Demand Trends Report, demand for gold in many Asian and Middle Eastern economies will be strong in 2022 due to the lack of other inflation hedges。If inflation falls, growth in gold demand will slow。But we don't think demand will decrease because retail demand for gold tends to be more persistent.。

Gold Jewelry Demand and Technology Gold

Gold manufacturing demand in 2022 is sluggish but resilient, setting the stage for 2023

In 2023, gold demand is expected to improve further from the resilient 2022。

China's market will be released due to the suppression of the epidemic demand, in the economic growth spawned by the gold jewelry demand to inject growth momentum;。

Worsening global economic conditions may drag down demand for gold jewellery outside China, threatening to weaken the positive impact of the Chinese market's large base。

Demand for gold jewellery will also benefit from a resilient 2022, with China's lifting of epidemic control measures providing a major growth driver for gold jewellery demand.。The rebound in the economy, the release of suppressed demand, and the balance of local gold prices are expected to reach the levels of 2016 to 2018 in 2023。However, after the peak of the first round of the epidemic, if China, as the West has experienced, other equally suppressed demand for goods and services could grab the limelight from gold demand。

There is also a risk that the next round of outbreaks will come back.。There is a risk of a more severe recession outside China, potentially offsetting the expected rise in Chinese demand.。

In contrast, India had a weak fourth quarter and an unfavorable start to 2023, suggesting that Indian gold jewellery demand could not match China's expected growth.。As many as 67 auspicious days for marriage in India in 2023 (up from 55 days in 2022), coupled with higher autumn crop market prices [1], will help the gold jewellery market to recover, although rising local gold prices and high inflation in rural areas are likely to dampen demand for some gold jewellery。

The outlook for demand for technology gold in 2023 remains bleak as the global electronics industry is dragged down by the suppression of China's electronics industry and weak consumer demand。In addition, the risk of recession in Europe and the United States will further dampen the demand for discretionary spending on goods.。However, the entire electronics industry is expected to continue to adjust inventories, which is likely to provide some support for year-end demand.。

Central Bank Purchases

It is difficult to meet the performance in 2022.

Central bank purchases may be harder to reach 2022 levels in 2023, but could still be better than expected。

The decline in the central bank's total reserve assets has the potential to limit the growth of its gold allocation.。

It is still difficult to predict central bank demand for gold, as such demand is usually policy-driven and does not always respond to common economic drivers - although we often use these factors to analyze other gold demand。Independent reports on central bank gold holdings (often lagging) suggest surprises are highly likely this year。However, slower aggregate reserve growth could put pressure on some central banks to affect their gold quotas。As a result, we believe that central bank purchases in 2023 are likely to be more moderate。

gold supply

Gold production is expected to grow well again in 2023

Higher production of existing gold mines may drive the total supply of gold to achieve moderate growth again in 2023.。

Gold recoveries are expected to decline, but inflation in Western markets has fallen and a sell-off is already on the horizon, so an increase in recoveries cannot yet be ruled out。

Gold production in the Americas is likely to increase in 2023, driven by existing gold expansion projects in North America, and is expected to exceed the highest level in 2018。

In 2022, gold prices in major gold recycling areas rose, but did not trigger a sell-off, contrary to model predictions。But before the year-end rally, gold prices fell for months, curbing some price-sensitive gold sales.。In addition, high inflation may also prompt some people to continue to hold gold.。Inflation is expected to decline in 2023, accompanied by a higher risk of recession and a gradual increase in the risk of selling due to inflation and economic pressures.。