Gold Market Commentary - December 2022

Jan. 11, 2023 12:38 AM ETDBP, JJP, GLTR, JJPFF, GLD, IAU, DGL, BAR, SGOL, OUNZ, GLDI, IAUF, GLDM, AAAU, BGLD, IGLD, GBUG, IAUM, PBUG, PHYS, GDX, GDXJ, GDXD, GDXU, GOEX, SGDM, RING, PICK, SGDJ, GOAU, GDMN
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World Gold Council
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Summary

  • A strong start to December set the tone for gold to make a series of highs and higher lows over the month.
  • 2022 provided a textbook example of how diverse sources of demand and supply can counterbalance one another and provide gold with its uniquely stable portfolio-additive performance.
  • In our view, gold’s resilience in 2022 was a result of its often ignored multifaceted sources of demand and supply.
  • Arguably the most surprising development in the gold market in 2022 was the level of demand from central banks.
  • Physically-backed gold ETFs registered their eighth consecutive month of negative demand in December.

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2022 - A year of conflicting forces

  • Gold posted a small gain in 2022; no mean feat given an unprecedented rise in rates and a strong US dollar.
  • 2022 was a textbook example of gold’s stable and
% ReturnDownloadEconomic ExpansionRisk & UncertaintyOpportunity Cost (<a href='https://seekingalpha.com/symbol/FX' title='FX Alliance Inc.'>FX</a>)Opportunity Cost (Rates)MomentumUnexplainedGold ReturnJun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22-20-1001020

Data as of 6 January, 2023 (Sources: Bloomberg, World Gold Council)

Largest absolute calendar year changes in TIP yield since its launch10y TIP yield, y-o-y bpsGold US$/oz, % y-o-yDownload10y TIP yield, y-o-y bpsGold price, y-o-y %20022011201320202022-300-200-1000100200300-30-20-100102030

Sources: Bloomberg, World Gold Council

% ReturnDownloadEconomic ExpansionRisk & UncertaintyOpportunity Cost (<a href='https://seekingalpha.com/symbol/FX' title='FX Alliance Inc.'>FX</a>)Opportunity Cost (Rates)MomentumUnexplainedGold ReturnJun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22-20-1001020

9 January, 2023 (Sources: Bloomberg, World Gold Council)

Years 1972 to 2022, in order of lowest to highest correlationCorrelationDownload2022202260/40 portfolioGold US$/oz-100-80-60-40-20020406080100

Sources: Bloomberg, World Gold Council

This article was written by

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The World Gold Council is the market development organization for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership, and be the global authority on the gold market. We are a unique organization that delivers tangible benefits to the gold industry. We are an active force within the market, working with a large and diverse set of partners to create access, drive innovation and stimulate demand, while providing a collective voice for our members. We provide insights into the international gold markets, helping people to understand the investment qualities of gold and its role in meeting the social and environmental needs of society. For more information visit www.gold.org.

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