Investors across the globe have been snapping up gold bars and coins as they seek a safe haven investment in the face of rampant inflation and concerns about growing fissures in the financial system.
U.S. gold bar and coin demand jumped to 32 tons in the first quarter, a 40 percent increase from the prior quarter, and a 4 percent year-over-year increase. It was the strongest quarter of bar and coin buying since 2010, according to the World Gold Council. Investors accelerated their move to the safety of gold following the collapse of Silicon Valley Bank and Signature Bank in March, financial shocks that raised the risk of instability in the banking system.
Worldwide demand for bars and coins hit 302 tons, equivalent to $18.4 billion, the third consecutive quarter that demand has topped 300 tons, reflecting the strongest gold buying in a decade.
Nations suffering from runaway inflation are witnessing explosive demand for gold. Turkey, where inflation has been running near 50 percent, saw demand for gold bars and coins leap fivefold during the first quarter to more than 50 tons. Egypt, suffering from high inflation and repeated currency depreciations, saw a doubling in bar and coin purchases to 7 tons. Similar challenges also drove strong demand in Iran.
China, the world’s biggest gold market, saw a 34 percent year-over-year increase in demand as the country emerged from the COVID-pandemic.