Yousef Al Arabi (Abu Dhabi)
The volume of gold sales in the United Arab Emirates during the first quarter of this year grew by 36.79%, reaching 14.5 tons, compared to 10.6 tons during the corresponding period of 2021, according to a report by the World Gold Council.
According to the report on demand trends for gold issued by the council yesterday, jewelry accounted for 86.2% of the total volume of gold sales in the UAE during the first quarter of this year, recording 12.5 tons, compared to 8.3 tons during the first quarter of 2021.
The share of financial instruments, bullion and gold coins amounted to 13.8%, recording 2 tons, compared to about 2.3 tons during the first quarter of last year.
Quarterly, the volume of gold sales grew by 19.8% during the first quarter of this year to record about 14.5 tons, compared to 12.1 tons.
In terms of jewelry and goldware, its sales increased during the first quarter by 25%, compared to the last quarter of last year, when it recorded 10 tons.
strong start
Globally, the gold market witnessed a strong start to 2022, as demand in the first quarter of the year, excluding over-the-counter trading, increased by 34% on an annual basis, thanks to strong flows of traded investment funds, which reflects the position of gold as a safe haven for investment in times of uncertainty. geopolitical and economic.
Geopolitical crises weighed on the global economy and re-attracted investors’ interest, causing the price of gold to rise to $2,070 an ounce for a brief period in March, approaching an all-time high.
The “Gold Demand Trends” report revealed that gold-backed ETFs recorded the strongest quarterly inflows of 269 tons since the third quarter of 2020, exceeding the annual net outflows of 173 tons in 2021, which was partly driven by higher prices gold.
Bullion Demand
At the same time, the demand for bullion and gold coins exceeded the average demand in five years by 11%, recording 282 tons. However, the return of lockdowns in China and higher prices in Turkey contributed to a 20% year-on-year decline, compared to the first quarter of 2021 which saw very strong demand.
Turning to the jewelry sector, global gold demand fell 7% year-on-year to 474 tons, mainly driven by weak demand in China and India. Despite the strong performance in China during the Lunar New Year period, this performance was subsequently diminished due to the outbreak of the Covid pandemic in February and March, which led to the implementation of strict closures as China continued to follow the “zero Covid” policy.
gold in technology
The demand for gold in the field of technology recorded its highest level in four years, recording 82 tons, an increase of 1%, compared to the first quarter of 2021. While the sector witnessed modest growth, it was not without challenges and major financial and industrial centers such as Shanghai witnessed the return of operations Shutdown, affecting the electronics supply chain.
central banks
Net buying by central banks more than doubled compared to the previous quarter, adding more than $84 trillion to official gold reserves during the first quarter of 2022, as countries such as Egypt and Turkey dominated purchases in the sector and while buying declined by 29% compared to the first quarter. From 2021, however, central banks continue to estimate the performance of gold in times of uncertainty.
The total supply of gold rose 4% year on year. This was driven by strong mine production, which was 856 tons. Recycling also increased 15% to 310 tons as a result of higher gold prices.
safe haven
“The first quarter of 2022 was a difficult year, with turmoil, geopolitical crises, supply chain difficulties and rising inflation,” said Louise Street, senior analyst for Europe, Middle East and Africa at the World Gold Council. Not only for investors but also for retail consumers thanks to its unique positioning as a dual nature asset class.”
She added: “Investment demand is expected to remain strong, as the combination of high inflation and rising geopolitical tensions is likely to increase demand for gold among investors. On the other hand, consumers are facing the global cost of living crisis, which means that many will reconsider how they spend their money. As consumer demand recovers from the weakness caused by the coronavirus, continued growth in jewelry demand could be hampered by higher costs and a general economic slowdown.