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According to the World Gold Council (GC), the global demand for gold has just returned to pre-pandemic levels.

As the world slowly recovers from the pandemic, it will be of special interest to gold devotees and market watchers to know that, according to the World Gold Council (GC), the global demand for gold has just returned to pre-pandemic levels. Stronger central bank buying has coupled with strong demand from consumers pushed the year-to-date total to its pre-pandemic levels, and it is likely to be up for the rest of the year. According to the WGC, gold demand rose significantly in the third quarter of 2022, though it should be noted that there was simultaneously a notable contraction in investment demand.

What is the Cause of Current Gold Demand?

It was the physical demand for gold by consumers that returned the gold to its pre-pandemic status. Remarkably, this year to date gold demand is up 18% compared to the first nine months of last year. According to an interview with Kitco News, global head of research at the World Gold Council Juan Carlos Artigas attributes this rise to pre-pandemic levels to an increase in jewelry, solid demand for bars and coins, and consistent purchase from central banks. According to Artigas, the latest report shows that the gold market is driven by more than just investment demand in paper futures and ETFs.

“Gold continues to prove itself as a global Market,” said Artigas. “You can’t just use one label to define the gold market. Gold’s diverse source of demand is why it should have a strategic place in an investor’s portfolio.” (1)

It was these market cues that persuaded retail investors to turn to gold for its status as a store of value, while inflation ran rampant and political uncertainty reigned all around the globe. Investors hedged inflations with bar and coin investment, the result of which was driving up total retail demand. Both Turkey and Germany exhibited significant purchasing, though such visible contributions came across all major markets.

Why is Global Jewelry Consumption Important?

Actual jewelry consumption cannot be underestimated as a contributing factor to the increase in global gold value, as it has also rebounded and is now back to pre-pandemic levels, much to the relief of those with significant gold investments. To see where this originated, one has only to turn their sights to India whose urban consumers alone drove up demand significantly. What is also impressive is the growth seen in much of the Middle East, particularly in Saudi Arabia and the United Arab Emirates. Chinese jewelry saw a more modest year-on-year increase, but clearly exhibited one nonetheless, driven by higher consumer confidence and a dip in the local gold price. Such a dip in gold price is certain to release some pent-up consumer demand. All of these factors serve to explain why gold demand is up 18% this year compared to the first three quarters of last year.

What About Gold Supply?

Regarding supply, mine production was up somewhat in the third quarter of 2022, after having shown consistency in growth for the previous six consecutive quarters. However, consumers were less likely to recycle their gold during this time period because of surging inflation and an uncertain economic outlook, which made for a noticeable decrease in recycling.

With global jewelry demand firmly on the rise, investors are showing an increasing inclination to keep a solid footing in gold. This is happening across the board, from individual investors to the central bank’s reported plans to increase its gold reserves. All of these signs point towards gold continuing to be a safe haven for investors, especially when you consider that it has performed better than other asset classes in 2022. With these factors in mind, it is also logical that mine production will continue to be on the rise.

Is This a Good Time to Sell My Gold?

With all of the important markers for a return to pre-pandemic levels for gold, now is considered a safe time to bring your gold out and exchange it for what it’s actually worth. There is no better place to do this than at Gold Rush Westminster, where we will evaluate your gold pieces in just minutes in a relaxed, no-pressure, no-obligation environment. We look forward to meeting you and offering you a positive personal experience, as well as a good home for your gold.