Net purchases in 2023 almost matched the previous year’s record, the World Gold Council has said

Total gold demand hit the highest level on record last year of 4,899 tons amid global uncertainty and thanks to continued strong buying by central banks, according to the World Gold Council (WGC).

In its Gold Demand Trends report for the full year 2023, the industry group said that purchases by central banks maintained a “breakneck pace,” reaching 1,037 tons, almost matching the 2022 record.

“Even though it [central bank purchases] is not so strong as it was in 2022, it is substantially higher than prior to 2022 and it exceeded our expectations,” said John Reade, market strategist at the WGC. “It is a very impressive number,” he added. 

Purchases by central banks are expected to slow down by around 200 tons in 2024 but remain higher than prior to 2022, according to Reade. The strategist noted, however, that demand for gold among central banks could actually accelerate.

The WGC report highlighted that global gold jewelry consumption was steady in 2023 – at 2,092 tons – due to a 17% post-Covid increase in demand in China and despite high gold prices. Meanwhile, purchases of gold bars and coins declined by 3% as European demand continued to tumble. The report also showed that global gold exchange traded funds (ETFs) saw a third consecutive annual outflow in 2023, shedding 244 tons. According to the WGC, annual mine production last year increased to 3,644 tons, but fell short of the 2018 record.

READ MORE: Gold to hit new highs in 2024 – Reuters

Gold prices hit a record $2,135.4 per ounce in December and have held above the psychological level of $2,000 so far this year. Experts say the rally will continue as lingering uncertainty about the prospects for the global economy in the wake of recession fears and heightened geopolitical tensions in the Middle East spur safe-haven demand for the metal.

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