The World Gold Council (WGC) said Friday that investor buying dropped in the first three months of 2023, offsetting central bank and Chinese consumer purchases.
In its latest quarterly demand trends report, the WGC reported 1,081 tonnes, down 13% from the first quarter of 2022.
Jewelers buy half of the gold, while investors and states buy the remainder. During economic uncertainty, investors buy more gold.
Demand rose 11 years in 2022 due to unprecedented central bank purchases. As a result, gold prices are reaching record highs around $2,000 an ounce.
The WGC said that central banks acquired 228 tonnes of gold in the first quarter, higher than January-March since 2000.
After COVID-19 controls were lifted, China’s jewelry demand reached 198 tonnes, the highest since Q1 2015.
The U.S. acquired 32 tonnes of gold bars and coins, the most since 2010.
The WGC said European gold bar and coin purchases declined, Indian jewelry demand plummeted to a three-year low, and exchange-traded funds (ETFs) holding bullion for investors dumped gold.
As bank failures spooked markets and analysts predicted the end of U.S. interest rate hikes, investment demand rose in March.
The WGC expected investment demand to rise and central bank purchases to remain strong, albeit below last year’s level.
WGC analyst Krishan Gopaul said investor hoarding might raise gold prices, restricting demand in countries like India, where high costs turn consumers off.
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