The World Gold Council (WGC) said that overall demand for gold reached a record high in 2023 and is likely to continue to increase this year amid the expected easing of the Fed's monetary policy.
According to WGC estimates, in 2023, total gold consumption increased by about 3%, to 4,899 tons (the highest value since the beginning of data collection, that is, since 2010). This increase was caused by steady purchases of gold by Central Banks, as well as an increase in demand for opaque over-the-counter markets.
Last year, gold prices rose by 13% amid economic and political uncertainty, increased geopolitical tensions and expectations that the Fed will soon begin lowering interest rates.
Meanwhile, the WGC said that in 2023, the annual demand growth in the OTC market reached 753% (the sharpest increase since at least 2011). The WGC expects investors to continue accumulating gold at an accelerated pace this year amid the start of the Fed's monetary easing cycle. The data also showed that in 2023, annual net purchases of gold by Central Banks amounted to 1,037 tons, which is only 45 tons less than the record set in 2022. It expects central-bank buying to top 500 tons this year.
As for the value of gold, the WGC predicts prices to rise to $2,200 per ounce or higher. Spot gold peaked at $2,135.39 in December.