Summa­ry of gold market develop­ments in 2023

Gold ended 2023 at record high levels as the LBMA Gold Price PM reached a new historic peak of US$2,078.40 per ounce on 28 December, the last trading day of 2023. The gold price rose 14.6% on the year, defying expectations amid a high interest rate environment and outpacing commodities, bonds and emerging market stocks.

Gold’s positive performance was linked to a combination of factors:

• Strong central bank demand

• Robust retail demand in key markets
• And increased geopolitical risk, especially in the last part of the year

The average LBMA (PM) gold ounce price during 2023 ranged between EUR 1750 and EUR 1880 (1800–2000 USD). In 2023 central banks’ net purchases of gold were 14% higher than in 2022, with a net purchase of 800t last year, a significantly higher compared to previous years After the third quarter of last year, mining production also reached a new annual peak of 2,744t. The supply of recycled gold also increased to 924t (+9%), boosted by the high gold price.

Market breakdown by demand

Gold is an important part of the global central banks’ reserves and and they are significant holders of gold. The 2008 financial crisis prompted a fundamental change in central banks’ attitude towards gold and encouraged a reassessment of its role and importance in reserve asset management. Emerging market central banks have increased their purchases of gold, while European banks have ceased selling, resulting central banks representing a significant source of demand over the past year.

Jewellery industry represents the largest source of annual demand for gold per sector. This has declined over recent decades, but it still accounts for around 50% of total gold demand. India and China are by far the largest jewellery markets, together accounting for over 50% of the global jewellery industry total.

Sources: World Gold Council, LBMA