The latest Gold Demand Trends report by the World Gold Council shows that gold demand in the third quarter of 2022 reached a high of 1,181 metric tons, a staggering 28% increase compared to the same period the prior year. This robust demand pushed the year-to-date total back to pre-COVID levels, with both consumers and central banks driving this growth.
Central banks have been accumulating gold at an unprecedented rate not seen in 55 years. Analysts estimate that in Q3 2022, almost 400 metric tons of gold were purchased. Late last year substantial quantities of gold were bought by the central bank of China, but also the central banks of Turkey, India, Uzbekistan, Egypt, Qatar, and Iraq made notable purchases.
The findings of a recent survey of central banks, shows that 25% of respondents indicated their intention to increase their gold reserves in the coming 12 months.
However, despite this impressive overall demand, investment in gold was down 47% YoY as ETF investors withdrew 227 metric tons due to a challenging market environment of rising interest rates and a strong US dollar.
But this drop in investment demand did not deter retail investors from turning to gold as a safe haven amidst rampant inflation and geopolitical uncertainty. In fact, retail demand for gold in Q3 2022 soared 36% YoY, as investors sought to hedge against inflation by buying bars and coins, highlighting gold’s continued popularity as a store of value.
Jewellery consumption rebounded and reached pre-pandemic levels, with India seeing the highest demand with urban consumers driving the growth. Similarly, the Middle East also recorded impressive growth with Saudi Arabia and the United Arab Emirates leading the scorecard.
In light of these findings, it’s clear that gold continues to be a trusted and valuable asset for investors, even in uncertain times. Despite the headwinds faced throughout 2022, the enduring demand for gold showcases its resilience and its ability to weather market volatility.
Despite a volatile macroeconomic climate in 2022, gold’s status as a safe-haven asset was evidenced by its outperformance of most asset classes. Looking ahead into 2023, it is expected that central banks purchases and retail investment will remain robust.
Gold is up almost 17% from its November 2022 low and is currently flirting with its resistance of $1,878. The leading RSI indicator is constructive, and we see a good probability of that level being cleared subsequently. While a short-term pull back to unwind the overbought momentum conditions could be seen in the short-term, levels to $1,920 – $1,940 appear achievable in the coming months.
The December 2022 Nonfarm Payroll report revealed that the labor market remains resilient despite the Fed’s efforts to curb inflation, leading to a decline in the U.S. dollar boosting the price for gold. The latest rally in gold has also benefited from China’s reopening with investors’ attention now shifting to Thursday’s highly anticipated U.S. Consumer Price Index inflation report.
Gold’s upward momentum is expected to persist as investors anticipate further U.S. dollar declines in the coming year. The U.S. dollar has clearly peaked in September 2022, and its current downward trajectory is expected to continue. In addition to the safe-haven demand stimulated by inflation and financial market volatility, gold prices are being supported by central banks’ buying at a rate not seen since 1976, according to the World Economic Forum.
With over a third of the global economies projected to enter recession and uncertainty surrounding central banks’ monetary policy in the face of persistent inflation, financial markets are likely to face another tumultuous year. Now, more than ever, investors are turning to gold as a safe-haven asset to navigate the stormy waters of the global economy.
Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.