Gold demand soars on financial rebound, inflation surge: business

Seen as a haven funding in occasions of financial unrest, gold noticed demand surge 50 % within the last three months of final yr in contrast with the October-December interval in 2020, the World Gold Council stated in a report.

FILE: General, “gold drew course mainly from inflation and rate of interest expectations in 2021”, the WGC concluded. Image: 123rf.com

LONDON – International gold demand soared within the fourth quarter of 2021 as inflation rocketed, serving to to recoup a lot of the drop triggered by the pandemic, business information confirmed on Friday.

Seen as a haven funding in occasions of financial unrest, gold noticed demand surge 50 % within the last three months of final yr in contrast with the October-December interval in 2020, the World Gold Council stated in a report.

General final yr, “demand recouped a lot of the COVID-related losses sustained throughout 2020”, the WGC stated, including that whole bodily purchases jumped 10 % to 4,021 tonnes.

Gold demand “within the consumer-driven jewelry and expertise sectors recovered all year long in step with financial development and sentiment, whereas central financial institution shopping for additionally far outpaced that of 2020”, the Council added.

Trying forward, it stated growth of 5G telecoms infrastructure ought to assist assist demand for gold within the sector.

“However demand faces some dangers from a slowdown in China in addition to COVID-related restrictions,” the WGC warned.

MARRIAGE BOOST

Gold jewelry demand jumped by greater than half in 2021 on robust shopping for in India and China, as celebrations together with marriages postponed by COVID lastly happened.

In India, “tens of millions of individuals get married, and that includes a certain quantity of gold”, WGC spokesman John Mulligan advised AFP.

Elsewhere, international bar and coin funding reached an eight-year excessive.

“Inflation issues had been a key driver, particularly within the US and Germany, which each noticed document annual demand,” the report stated.

Nonetheless international holdings of gold exchange-traded funds — that permit funding outdoors of futures market — fell by $9 billion, or 5 %, final yr.

General, “gold drew course mainly from inflation and rate of interest expectations in 2021”, the WGC concluded.

Central banks are elevating rates of interest to fight decades-high inflation.

“Funding could battle in 2022 amid competing forces however client demand ought to maintain robust and central banks will doubtless preserve shopping for.”

The gold value dropped 4 % final yr.

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