Gold demand surged to a report excessive in 2024, pushed by shopping for from central banks and particular person traders.
Knowledge from the World Gold Council’s (WGC) newest report on gold demand reveals that in 2024, complete annual demand for gold, together with over-the-counter transactions, reached a record-breaking 4,974 metric tons (MT).
Annual demand was up by 1 p.c year-on-year from 2023’s 4,945.9 MT.
Central banks added greater than 1,000 MT of gold to their reserves for the third consecutive yr, whereas funding demand hit a 4 yr excessive, supported by a powerful efficiency in gold exchange-traded funds (ETFs).
Central banks lead gold demand
Central banks remained the biggest drivers of gold demand in 2024. As a gaggle, they made cumulative internet purchases of 1,045 MT in 2024, with the fourth quarter alone accounting for 333 MT.
The Nationwide Financial institution of Poland led the upsurge, buying 90 MT of the yellow metallic in 2024, whereas different rising market central banks additionally contributed considerably to the general complete.
This heightened demand from central banks marks a steady shift within the international financial system, with central banks more and more favoring gold as a hedge in opposition to foreign money volatility and geopolitical tensions.
2024 was the third yr in a row by which central banks’ gold purchases exceeded 1,000 MT, marking a notable enhance in comparison with the pre-2022 common of 473 MT.
Regardless of questions on future demand, central banks are anticipated to take care of their buying momentum into 2025, significantly as geopolitical dangers proceed to affect coverage selections.
Investor demand helps gold ETF progress
Gold’s enchantment to particular person traders additionally remained sturdy in 2024, significantly in gold ETFs.
Funding demand for the valuable metallic reached 1,180 MT for the yr, a 25 p.c enhance from 2023, with ETFs drawing important inflows, particularly within the second half of the yr. These inflows have been pushed by elements together with decrease rates of interest, geopolitical instability and a strengthening gold worth.
In distinction to the earlier three years, throughout which gold ETFs skilled substantial outflows, 2024 noticed near-stagnant holdings by the tip of the yr, exhibiting a marked shift in investor sentiment.
Market contributors more and more turned to gold as a protected haven, and the US market specifically witnessed appreciable ETF inflows, pushed by the relative weak point of the US greenback and considerations over inflation.
Gold jewellery demand struggles as worth climbs
Whereas funding demand soared, the jewellery sector struggled in 2024, with international jewellery consumption falling by 11 p.c to 1,877 MT. The numerous gold worth rise throughout the yr led to decrease volumes of gold jewellery being bought, as shoppers discovered it more and more troublesome to afford the yellow metallic.
The weak point in jewellery demand was international, although India noticed comparatively smaller declines in comparison with China, which skilled a big drop of 24 p.c from 2023.
Nevertheless, the worth of gold jewellery consumption elevated by 9 p.c, reaching a report excessive of US$144 billion. This allowed jewelers to attain larger gross sales figures, with a marked distinction between demand quantity and worth.
Expertise and industrial demand will increase
Within the know-how sector, demand for gold grew by 7 p.c in 2024, which the WGC attributes largely to the rising adoption of synthetic intelligence (AI) infrastructure.
Gold utilized in electronics rose by 9 p.c year-on-year, contributing to the know-how sector’s stable demand. General, complete annual gold demand from the tech sector got here to 326 MT.
Whereas gold’s function in industrial purposes is a smaller portion of total demand, its utilization in superior applied sciences continues to develop, underlining its significance in cutting-edge sectors like AI, electronics and renewable vitality.
Gold mine and recycling provide rise
Gold provide noticed modest progress in 2024, rising by 1 p.c to a report 4,974 MT, a brand new excessive for the information collection. Each mine manufacturing and recycling have been up in comparison with the prior yr, with recycling climbing 11 p.c.
The WGC states that the outlook for gold provide stays robust, with expectations for sturdy mine manufacturing and potential will increase in recycling charges within the coming yr.
The gold worth reached a mean of US$2,386 per ounce in 2024, a 23 p.c enhance from the earlier yr. In This fall, the typical worth peaked at US$2,663, contributing to a complete worth of US$111 billion for the quarter.
What’s driving gold’s report worth highs?
The WGC’s report comes because the gold worth hits new data, and in an interview with the Investing Information Community, Joe Cavatoni, senior market strategist, Americas, on the WGC, make clear the metallic’s worth drivers.
“I believe many traders are seeing the advantages and the deserves of getting gold as a diversifying asset of their portfolio,” he mentioned. “I believe they’re understanding that the danger shocks you may see to threat property will proceed to be one thing that may develop over the subsequent two to a few months at a minimal as we begin to hear and see insurance policies unpacked.”
Watch Cavatoni focus on the WGC’s newest report.
Cavatoni additionally pointed to expectations of decrease rates of interest as a motivating pressure for gold.
“All of these elements are stacking as much as proceed to be a really robust efficiency driver for gold,” he mentioned.
Tariff uncertainty can also be contributing to gold’s motion. The US has positioned extra tariffs on China, and though it is deferred tariffs on Canada and Mexico in the intervening time, a lot uncertainty stays.
In Cavatoni’s opinion, it is going to be key for sector contributors to tune out distractions.
“I believe the important thing factor proper now could be that you could clearly see the advantages of gold in a portfolio that is diversified. You possibly can see the advantages of getting it as a element of your allocation mentality, and I believe total what I might say is that purchasers, traders and people who perceive the gold market want to grasp there will be plenty of noise,” he famous.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.
Editorial Disclosure: The Investing Information Community doesn’t assure the accuracy or thoroughness of the data reported within the interviews it conducts. The opinions expressed in these interviews don’t replicate the opinions of the Investing Information Community and don’t represent funding recommendation. All readers are inspired to carry out their very own due diligence.
