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Demand for gold in the world increased by 34%

Demand for gold in the world increased by 34% - Photo 1.

A shop selling gold jewelry in the city of Kolkata, India – Photo: REUTERS

According to the WGC, the gold market is off to a solid start this year, with gold demand in the first quarter of 2022 growing 34% year-over-year.

Geopolitical crises have weighed on the global economy and made investors more interested in gold.

The WGC’s gold demand trend report noted that in March, the price of gold was pushed to $ 2,070 per ounce, close to an all-time record.

Since the third quarter of 2020, the cash flow into gold exchange-traded funds (golden ETFs) has reached the highest value equivalent to 269 tons of gold, while the cash outflow from these funds is equivalent to only 173 tons of gold. in 2021.

A gold ETF is a commodity exchange-traded fund that includes only one main asset, gold. In fact, investors do not hold gold. Instead, investors will receive cash equivalents when selling gold.

In addition, demand for gold bars and coins was 11% higher than the five-year average of 282 tonnes.

However, demand for gold bars and coins in the first quarter of 2022 fell 20% year-on-year due to the effects of prolonged blockades in China, as well as higher gold prices in Turkey.

In the jewelry segment, global gold demand fell 7% year-on-year to 474 tonnes, mainly due to weaker demand in China and India.

In the technology sector, gold demand hit a four-year high of 82 tonnes, up 1% in the first quarter of 2021.

The amount of gold purchased by central banks more than doubled compared to the fourth quarter of 2021, adding more than 84 tons to the official gold reserves in the first quarter of 2022.

Louise Street, senior analyst at WGC, said the current volatility “has strengthened gold’s position as a safe haven” for both investors and consumers.

“Given current market developments, investment demand is expected to remain strong. High inflation combined with increased geopolitical tensions is likely to boost gold demand among investors. On the other hand, Consumers are facing a global cost of living crisis, which means many will be rethinking the way they spend their money,” Street explained.

Overall, the WGC assesses the total gold supply to increase by 4% in the first quarter of this year compared to the same period last year.

Gold supply was driven by strong mining output, which reached 856 tonnes. In addition, gold recycling increased 15% year-on-year to 310 tonnes.

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