The World Gold Council’s latest Gold Demand Trends Report revealed that annual demand (excluding OTC markets) has recovered many of the COVID-induced losses from 2020 to reach 4,021t for the full year in 2021. The reports shows the demand for gold reached 1,147tin Q4 2021, its highest quarterly level since Q2 2019 and an increase of almost 50% year-on-year, according to the World Gold Council.
Gold bar and coin demand rose 31% to an 8-year high of 1,180t as retail investors sought a safe haven against the backdrop of rising inflation and ongoing economic uncertainty caused by the corona virus pandemic. Meanwhile, the World Gold Council’s data series reported outflows of 173t in 2021 from gold-backed ETFs as some more tactical investors reduced hedges early in the year amid COVID vaccine rollouts,whilerising interest rates made holding gold more expensive.
Nevertheless, these outflows represent only a fraction of the 2,200t that gold ETFs have accumulated over the preceding five years, demonstrating the continuing importance investors place on including gold in their portfolio. Louise Street, Senior Analyst EMEA at the World Gold Council commented: “Gold’s performance this year truly underscored the value of its unique dual nature and the diverse demand drivers. On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand.