While the world's financial markets have seen significant volatility in 2022, Gold will prove its durability in 2023.
When markets struggled in January 2023, investors sought sanctuary in gold and other precious metals. Gold bullion rose 5.7% in January, attracting individual, institutional, and government purchases. All investors need a diversified portfolio with a long-term view, yet this advice is often ignored when it comes to gold.
As rich as its history, gold has always been valuable due to its social and psychological aspects. Not just gold itself but gold jewellery pieces have always been a part of early civilisations.
People often look to gold as a representation of riches, power, and grandeur. It has also been used as a means of exchange for many centuries. Individuals may purchase gold for a wide variety of purposes, such as jewellery or in the form of bars. The desire to flaunt wealth and social standing is a major one. Even in societies with a rigidly established social order, this phenomenon persists.
Dubai's gold was once solely available to wealthy men. For their daughters' and their own marriages, they would have bought gold jewellery that matched their social status.
An Emirati woman's bridal gold jewellery symbolised riches. Once oil was discovered, the UAE economy changed. Nowadays, gold jewellery is affordable. Gold merchants and designers in the UAE must keep up with new jewellery trends since UAE women have sophisticated tastes. Yet, demands for real Emirati jewellery persevere.
Moreover, gold is corrosion-resistant and long-lasting. Because of its malleability, it is used in a wide variety of electrical, dental, medical instruments, military, aerospace, and automotive applications around the world.
The effects of economic forecasts and geopolitical factors on gold have been obvious these days. The new year has delivered a more tempered outlook after 2022's near-certainty of a recession. In January, the International Monetary Fund (IMF) raised its global economic estimate to 2.9% in 2023, easing concerns of a worldwide recession.
China's GDP is expected to rise 5.2% this year as COVID restrictions are eased. Central banks' anti-inflation initiatives have also raised expectations for global inflation's peak. The S&P 500 fell 19.44% in 2022, its weakest year since 2008.
With gold and cryptocurrency, investors nowadays have chosen to invest in bullion. Bitcoin, the biggest cryptocurrency by market cap, fell roughly 65% in 2022. Gold rose 0.4% in 2022, proving its usefulness as a store of value. With the crypto industry's regulatory issues in the second half of 2022, bullion's steady, regulated, and physical utility has prompted many investors to choose a more cautious choice.
Due to this, gold as an investment surged. Gold is attracting younger, tech-savvy investors. Millennials buy precious metals using internet platforms like "DigiGold." Digital gold trading platforms are also meeting unmet demand in the UAE and GCC.
UAE becomes the most integrated global gold market. Gold has always been important in the UAE, but it has risen considerably in the past year. In 2022, Middle East consumption rose 15% to 190.4 tonnes. Also in 2022, UAE customers bought 46.9 tonnes of gold jewellery, up 38% from the previous year, according to World Gold Council (WGC) statistics. The UAE now leads Middle East gold sales, overtaking Saudi Arabia, Egypt, and Kuwait.
In 2023, gold will likely remain a haven investment for anyone looking to avoid the effects of inflation, political unpredictability, and the collapse of the stock market. Investors looking to rebalance their portfolios and hedge against potential economic upheaval are likely to maintain their interest in gold.
Mark your calendars for the Jewellery & Watch Show Abu Dhabi (JWS Abu Dhabi) if you're interested in perusing a lot more beautiful and rare jewellery or checking out stunning watches.
November 1-5, 2023 | ADNEC, Abu Dhabi
