Total annual gold demand reached a new, record high of 4 974 tons driven by strong central bank buying and growth in investment demand, according to the World Gold Council’s latest Gold Demand Trends report.
The report, released at the Investing in African Mining in Cape Town on Wednesday, said the combination of record high gold prices and volumes resulted in the highest ever total value of demand at $382 billion (R7.1 trillion).
“Gold once again dominated headlines in 2024, with prices reaching 40 record highs last year. Yet, the demand trajectory of 2024 was far from linear, with central banks posting strong demand in the first quarter before moderating through the middle of the year and finishing with a strong fourth,” said Louise Street, a senior markets analyst at the World Gold Council.
Central bank purchases exceeded 1 000 tons for the third year in a row. Buying ramped up significantly in the fourth quarter, reaching 333 tons and bringing the annual total for central banks to 1 045 tons.
Global investment demand increased 25% year-on-year to 1 180 tons, a four-year high, driven by a revival in gold ETF demand in the second half of 2024.
Global gold ETFs added 19 tons in the fourth quarter of 2024, marking two consecutive quarters of inflows for the asset class.
Bar and coin demand was in line with 2023 volumes at 1 186 tons in 2024. Unsurprisingly, high prices dampened demand in the jewellery sector, with annual consumption decreasing by 11% to 1 877 tons.
This decline was due largely to China - down 24% year-on-year - though Indian demand remained resilient, dropping just 2% in 2024, in a record high price environment.
The technology sector saw its strongest quarter since Q4 2021, with demand reaching 84 tons. A modest rise in gold volumes used in artificial intelligence (AI) and electronics contributed to a 7% year-on-year increase, netting at 326 tons.
Total gold supply increased 1% year-on-year, reaching a new record high of 4 794 tons. Growth in both mine production and recycling contributed to the increase in total gold supply.
Street said the second half of the year saw a notable resurgence from Western investors which, combined with remarkable growth in Asian flows, brought global gold ETF flows into positive territory in the third and fourth quarters.
This was fuelled by the start of rate cutting cycles by many central banks and heightened global uncertainties, including the US presidential election and escalating tensions in the Middle East.
“In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates. On the other hand, jewellery weakness will likely continue as high gold prices and soft economic growth squeeze consumer spending power. Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk,” Street said.
BUSINESS REPORT