The World Gold Council (WGC) said that the decline in the US dollar was an important contributor to the rise in gold prices by 6.1% in January 2023, along with a decline in US Treasury yields.
And the WGC added, in a statement, that the yellow metal’s gains of 6.1% during January caused the ounce to reach $1924 by the end of the month.
The report indicated that a large part of the rise in the price of gold in January came as a result of the decline in the US dollar index that makes gold cheaper for holders of other currencies, followed by a significant drop of 37 basis points in the US 10-year Treasury yield.
The report of WGC indicated that the large rise in gold during December was slightly reversed in January, as gold revenues tend to experience some rebound.
The report added that a large part of the rise in gold during 2022, due to central bank purchases of gold, which is likely to continue through 2023.
The council's report stated that central banks accumulated an additional 28 tons of gold reserves in December.
Also, central banks' demand for gold in 2022 amounted to about 1136 tons, which is the thirteenth consecutive year of net purchases and an all-time record.
And the World Gold Council indicated that global investment funds started the year 2023 with net external inflows of $1.6 billion in January, and total holdings decreased by 26 tons (-0.8%) to 3446 tons.
The report of WGC affirmed that the average daily trading volume of gold in all markets during January amounted to 156 billion dollars per day, which is an increase of 37% compared to December.
However, average daily trading volumes for gold derivatives on the exchange jumped 58% month-on-month, followed by a 26% increase in the OTC market, an 18% increase in gold ETFs, as well as a net long position in gold futures on Comex.
There is still room for growth as current total net long positions of 572t are below the averages for 2020 (647t) and 2021 (866t).
Translated by Ahmed Moamar
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