January 31: The demand for gold in the international market has reached the highest level since 2011. Data show that this is the result of the increasing purchases from central banks and other investors seeking shelter from rocketing inflation.

The demand for the precious yellow metal, traditionally a safe haven for investment in times of economic and geopolitical turmoil, rocketed almost a fifth to 4,740.7 tonnes in 2022 from the previous year, AFP reported citing the World Gold Council (WGC).

According to the news agency, purchases from central banks more than doubled to reach 1,136 tonnes, the highest total for more than five decades, as the Ukraine war fuelled inflation.

"Gold is very much... a long-term store of value and the fact is it performs well in a time of crisis," AFP quoted WGC analyst Louise Street as saying.

"If you consider what's been happening in the backdrop of 2022, with geopolitics and rising inflation, those remain important drivers of demand."

"Gold demand faces mixed prospects in 2023 but with upside potential," the WGC said, adding that investment will likely be supported by elevated recession and geopolitical risks, and jewellery demand should benefit from continued recovery in China.

"Central bank buying could struggle to match 2022, however," it cautioned.

The gold price had rebounded sharply in March 2022 in the wake of Russia's invasion of Ukraine. But the metal ended on a stable note to gain 1.25 percent in value over the course of the year, AFP added.

In the context of Nepal, gold is being traded at Rs 105,800 per tola (11.66 gm), which is slightly less than the all-time high price of Rs 106,000 on January 26.

According to Federation of Nepal Gold and Silver Dealers Association Chair Manik Ratna Shakya, the prices of gold and silver have soared in the Nepali market due to the rise in the international market.

Prices of gold and silver are determined based on the international market prices.