World gold demand to grow 3% in 2023
World gold demand grew at a year-on-year rate of 3% in 2023, to 4,899 tonnes, according to the World Gold Council, based in London, UK.
With this, demand remained strong, being the highest in the last decade.
From 2013 to 2023, the lowest level of global gold demand occurred in 2021, when it totaled 4,001 tonnes.
The World Gold Council is a market development organization for the gold industry comprised of and funded by gold mining companies from around the world and a regulatory organization.
In the view of Canadian mining company Barrick Gold, gold demand in 2023 reflects continued high levels of net purchases by global central banks tempered by global gold ETF outflows.
The World Gold Council reported that collective ETF gold holdings declined by 244 tonnes over the past year, representing the highest level of annual outflows since 2013.
Demand for gold-backed ETFs, bullion and coins declined by a combined 15% in 2023, but this was more than offset by other investment demand, including over-the-counter transactions.
World gold demand
On the other hand, central bank purchases continued at an impressive pace during 2023, exceeding 1,000 tonnes for the second year in a row.
The last two years, 2022 and 2023, represented the two highest levels of net purchases in more than 50 years.
The World Gold Council estimates that global central banks added 1,037 tonnes to their reserves during 2023, the 14th consecutive year of net purchases.
Risk protection
Notably, the People’s Bank of China was the largest single buyer of gold during the year, with reported purchases of 225 tonnes representing the country’s highest annual purchases since at least 1977.
During the worst impacts of the Covid-19 pandemic, some central banks looked to their gold holdings as a source of liquidity in difficult economic times.
Their ability to do so provides a strong statement of why gold is a valuable reserve asset and a key source of reserve diversification.
According to Barrick Gold, the strong level of purchases in subsequent years shows that central banks view gold positively and as a long-term store of value.
