According to the latest report released by the World Gold Council, global gold demand in 2021 increased by 10% over the previous year, gradually recovering from the impact of covid-19 epidemic in 2020. The gold demand of China and India, the world’s top two gold consuming countries, is outstanding.
According to the latest global gold demand trend report released by the World Gold Council, in the fourth quarter of 2021, the global gold demand was 1147 tons, the highest quarterly level since the second quarter of 2019, with a year-on-year increase of nearly 50%.
last year, the total global demand for gold (excluding OTC transactions) reached 4021 tons, a year-on-year increase of 10%.
among them, the consumption demand for gold jewelry increased the fastest, reaching 2124 tons, with a year-on-year increase of 52%, basically the same as the total demand in 2019 before the epidemic. This was due to the strong performance in the fourth quarter, when global gold jewelry consumption demand reached the highest level since the second quarter of 2013.
In addition, affected by the rising inflationary pressure and the economic uncertainty caused by the covid-19 epidemic, retail investors sought refuge, which promoted the annual demand for global gold bars and coins to increase by 31% year-on-year last year, reaching an eight-year high of 1180 tons.
WGC pointed out that in the short term, gold prices may be affected by real interest rates. However, due to the rising inflationary pressure at the beginning of this year and the possibility of market correction, the demand for gold as a hedging tool will continue. In addition, consumption and central bank demand may continue to support gold demand.
global central bank gold reserves rose to the highest level in nearly 30 years
WGC data also showed that as a net buyer of gold for 12 consecutive years, central banks increased their gold reserves by 463 tons in 2021, 82% higher than that in 2020, raising the global central bank’s gold reserves to the highest level in nearly 30 years.
However, the pace of the central bank’s purchase of gold slowed down in the second half of the year, and the net purchase of gold in the fourth quarter decreased by 22% year-on-year.
global gold ETF positions decreased
The global gold ETF position decreased by 173 tons in 2021, in sharp contrast to the record net inflow of 874 tons in 2020. The main reason is that some tactical investors reduced hedging investment when covid-19 vaccine was launched at the beginning of the year, and the rise of interest rate increased the cost of gold position.
However, it is worth noting that these outflows account for only a small part of the cumulative inflow of 2200 tons of global gold ETFs over the past five years, indicating that investors will continue to pay attention to the value of gold as an important part of their portfolio.
India’s gold imports rose to the highest level in 10 years
With the easing of concerns about the epidemic, Indians poured into jewelry stores again in 2021. After two years of downturn, India’s gold demand recovered.
WGC data show that in the three months to December, India’s wedding and celebration activities have increased in an all-round way, which more than doubled the country’s gold imports last year to about 925 tons, the highest level since 2011. The data also showed that India’s total demand for gold jewelry, gold coins and gold bars increased by 79% to 797 tons last year.
As the world’s second largest gold consumer, India’s gold demand outlook remains bright. P.R., CEO of WGC India. “From 2022, you will see a new normal of 800-850 tons of gold demand,” somasundaram said, while India’s average demand in the five years to 2020 was 667 tons.
Somasundaram said that covid-19 virus and its variants, as well as global concerns about inflation, interest rates and geopolitical situation, will remain factors of concern in 2022.
India is the world’s second largest gold consumer. The increase in its consumption will help boost global gold prices, but it may also expand India’s trade deficit and put pressure on the weak rupee.
China’s gold jewelry demand increased by 63% year-on-year
In 2021, the demand for gold ornaments in China, the world’s largest gold consumer, reached 675 tons, a year-on-year increase of 63%; The total demand for gold bars and gold coins reached 286 tons, a year-on-year increase of 44%.
Wang Lixin, CEO of the World Gold Council in China, said that the overall demand for China National Gold Group Gold Jewellery Co.Ltd(600916) in 2021 showed a strong trend. The main drivers of the increase in demand for gold jewelry in the Chinese market include stable economic growth, low gold prices and the popularity of high gram weight products such as ancient French gold jewelry.
In view of the substantial growth of gold investment demand in the Chinese market, Wang Lixin said that in addition to the relatively low gold price and stable economic growth, the increased sales of physical gold products by local commercial banks is also a key factor to promote growth.
Wang Lixin also predicted that looking forward to 2022, the relatively stable gold price outlook may provide support for the gold jewelry demand in the Chinese market in 2022.
