In 2012, gold prices were affected by a number of factors, including global economic uncertainty, the ongoing debt crisis in Europe, and concerns about inflation. Despite these challenges, gold prices remained relatively strong, with the metal ending the year at around $1,669 per ounce.
Throughout the year, gold prices were boosted by safe-haven demand as investors sought to protect their assets in the face of ongoing economic uncertainty. This was particularly true in the second half of the year, when the debt crisis in Europe and concerns about the fiscal cliff in the United States drove demand for gold.
In addition to these macroeconomic factors, gold prices were also influenced by central bank buying, with many central banks increasing their holdings of the metal as a hedge against currency and economic volatility.
Despite these positive factors, gold prices faced headwinds from a stronger US dollar and from rising interest rates, which reduced demand for non-yielding assets like gold.
gold market in 2012.
In 2012, the Indian gold market showed strong performance in the last quarter with a 41% increase in total demand compared to the same period in the previous year, reaching 261.9 tons. Jewlery demand was up 35% to 153.0 tons, while investment demand reached 108.9 tons. This strong buying may have been due to the anticipation of duty increases in January 2013. Meanwhile, Chinese demand was flat year-on-year, but showed a 1% increase in the fourth quarter to 202.5 tons. Central bank purchases for the year rose 17% compared to 2011, reaching 534.6 tons, the highest level since 1964. Global investment in ETFs increased by 51% compared to the previous year, though the fourth quarter was down 16% compared to the high levels recorded in the third quarter of 2012.
Overall, gold prices in 2012 demonstrated the metal’s resilience and ability to hold its value even in the face of economic uncertainty and other challenges. However, with ongoing economic and geopolitical risks, the outlook for gold prices remained uncertain heading into 2013.