Published: 2022.05.06. WGC: Gold Market Results for Q1 2022

WGC: Gold Market Results for Q1 2022 - Preview

Compared to the same period last year in 2021, the demand for gold in the first three months of 2022 increased from 919.1 to 1234 tons (+34.3%). It was the highest quarterly demand in three years. It exceeded the five-year average by 19%.
However, different market segments developed far from the same. Fundamentally positive dynamics occurred mainly due to the ETF sector. After an outflow of 170 tons was recorded in the same quarter last year, an inflow of 268.6 tons was recorded this year
On the contrary, the demand for gold bars and coins developed relatively negatively, which was due, on the one hand, to an extremely strong quarter of the previous year (low base effect), and on the other hand, the closure of the market in China and weakening demand in Turkey due to the devaluation of the national currencies.
In general, the demand for investment bars and coins decreased from 351.8 to 281.9 tons (-19.9%).
Negative signs were also observed in the jewelry sector, which, as experience shows, is of particular importance. Here there was a slight decrease compared to the previous year - from 538.7 to 517.8 tons (-3.9%). In the two most important demand countries, China and India, jewelry sales were hit particularly hard, down 8.4% and down 25.5%, respectively.
Central banks reported net purchases of 83.8 tons in the first quarter. Although this figure was more than double that of the previous quarter, it was markedly down by 28.7% compared to Q1 2021.
By the way, the smallest segment of the market, the industrial sector, recorded the most minor changes in Q1 2022. In this group of market participants, demand stagnation was recorded at the level of 81.7 tons (+0.9%).
On the supply side, growth in the global gold market was significantly lower than on the demand side. In general, growth was registered here from 1108.8 to 1156.6 tons (+4.3%). While primary production (gold mines) increased only from 834.6 to 856.5 tons (+2.6%), secondary production (processing) showed a much stronger upward trend. Growth was achieved here from 269.3 to 310.5 tons (+15.3%), which was mainly due to a significant increase in the price of gold.