A new report by the World Gold Council shows that in 2023, the demand for gold hit new highs as a slowdown in China’s economy and geopolitical tensions drove investors to the precious metal. Last year, total gold transactions came to 4,899 tons, a slight increase from 2022’s figure of 4,741. In December 2023, the price of gold stood at $2,100 per ounce as retail investors and central banks increased their gold purchases.
The biggest drivers of the metal’s demand were the Israel-Hamas conflict, the Russia-Ukraine war and China’s weak economy.
The global head of central banks at the World Gold Council, Shaokai Fan, believes that these factors will continue to boost gold’s prices this year. In a recent interview, Fan stated that 2023 was the second-highest year in history of the central bank purchasing huge amounts of gold. For two consecutive years now, central bank gold purchases have exceeded 1,000 tons.
The report also showed that in 2023, the People’s Bank of China was the biggest gold buyer at 225 tons. These purchases increased the bank’s holdings to 2,235 tons.
Fan also revealed that the real estate crisis in China had pushed more investors toward the precious metal. The China Evergrande Group, which was once one of the biggest property developers in the country, was recently ordered to liquidate by a Hong Kong court after it failed to reach a deal to restructure. Fan explained that investors in China were worried about the future of other asset classes and were turning to gold to protect their investment portfolios.
Data from the report also showed that in 2023, China became the largest buyer of gold jewelry globally. Previously, this position had been held by India. Roughly 603 tons of gold jewelry was purchased by individuals in China, a 10% increase compared to 2022 data. The growth was attributed to an increase in weddings that had been put off after the country’s economy reopened in late 2022 following the coronavirus pandemic.
Fan expects that the purchase of gold may continue to increase as the lunar new year approaches, noting that according to Asian folklore, the year of the dragon is a good year to have a baby.
Based on this year’s outlook, the World Gold Council notes that the purchase of gold may not reach 2023 levels. However, it adds, a drop in inflation could prevent a significant drop in demand. In 2023, inflation in America stood at 3.3%, which is higher than the Fed’s target of 2%. Last week, Federal Reserve chair Jerome Powell stated that it was unlikely interest rates would be cut next month.
The great market conditions that gold is enjoying positions gold exploration companies such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) well in terms of attracting investor interest.
MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.
MNW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
MiningNewsWire is powered by IBN