The latest Gold Demand Trends report by the World Gold Council shows that gold demand in the third quarter of 2022 reached a high of 1,181 metric tons, a staggering 28% increase compared to the same period the prior year. This robust demand pushed the year-to-date total back to pre-COVID levels, with both consumers and central banks driving this growth.

Central banks have been accumulating gold at an unprecedented rate not seen in 55 years. Analysts estimate that in Q3 2022, almost 400 metric tons of gold were purchased. Late last year substantial quantities of gold were bought by the central bank of China, but also the central banks of Turkey, India, Uzbekistan, Egypt, Qatar, and Iraq made notable purchases.

The findings of a recent survey of central banks, shows that 25% of respondents indicated their intention to increase their gold reserves in the coming 12 months.

However, despite this impressive overall demand, investment in gold was down 47% YoY as ETF investors withdrew 227 metric tons due to a challenging market environment of rising interest rates and a strong US dollar.

But this drop in investment demand did not deter retail investors from turning to gold as a safe haven amidst rampant inflation and geopolitical uncertainty. In fact, retail demand for gold in Q3 2022 soared 36% YoY, as investors sought to hedge against inflation by buying bars and coins, highlighting gold’s continued popularity as a store of value.

Jewellery consumption rebounded and reached pre-pandemic levels, with India seeing the highest demand with urban consumers driving the growth. Similarly, the Middle East also recorded impressive growth with Saudi Arabia and the United Arab Emirates leading the scorecard.

In light of these findings, it’s clear that gold continues to be a trusted and valuable asset for investors, even in uncertain times. Despite the headwinds faced throughout 2022, the enduring demand for gold showcases its resilience and its ability to weather market volatility.

Despite a volatile macroeconomic climate in 2022, gold’s status as a safe-haven asset was evidenced by its outperformance of most asset classes. Looking ahead into 2023, it is expected that central banks purchases and retail investment will remain robust.