HT Bureau
GUWAHATI, May 10: The World Gold Council’s latest Gold Demand Trends report reveals that while gold demand (excluding OTC) was 13% lower year-on-year, a recovery in the OTC market propped up total gold demand to 1,174t, a slight 1% increase compared to Q1 2022. With the price near record average highs for the quarter at $1,890/oz, a mixed picture for gold in Q1 exemplifies its diverse and global sources of demand. Central banks helped boost demand adding 228t to global reserves, a Q1 record high in this data series. Sustained and significant purchases from the official sector underscore gold’s role in international reserve portfolios during times of market volatility and heightened risk.
Investment demand was a chequered landscape in the first quarter. Renewed gold-backed ETF inflows in March, driven primarily by systemic risk in the US economy, partially countered outflows in January and February and helped bring quarterly outflows down to a modest 29t. On the other hand, bar and coin investment strengthened 5% year-on-year to 302t, although there were notable shifts in key markets. US bar and coin demand hit 32t in Q1, the highest quarterly level since 2010, and was driven primarily by recession fears and a flight to safety amid the banking turmoil. This increase helped offset weakness in Europe and particularly Germany where there was a 73% drop in demand. This notable decrease in German demand was primarily the result of real interest rates turning positive and the rise in the euro gold price which encouraged profit-taking.
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On the supply side, there was a slight increase in Q1 total gold supply to 1,174t, with marginal 2% growth in mine production and a 5% uptick in recycling driven by the higher gold price.
