Historic jump in gold demand in 2024; global market in unprecedented situation
According to the latest report released by the World Gold Council, 2024 marked a historic turning point in the global gold market. The report, which analyzes trends from the fourth quarter and the full year of 2024, reveals that gold demand reached an all-time high of 4,974 metric tons.
This significant surge was driven by a combination of increased central bank purchases, renewed investor confidence, and ongoing global economic and geopolitical volatility.
Alongside this unprecedented demand, the price of gold also saw a substantial rise, with the total value of gold demand in 2024 reaching $382 billion. These figures highlight the central role of gold in today's turbulent global economic landscape.
Central Banks: A Key Driver of Gold Demand
One of the most prominent factors behind the surge in gold demand in 2024 was the continued large scale purchases by central banks. For the third consecutive year, central bank gold acquisitions exceeded 1,000 metric tons, reaching 1,045 tons by the end of the year. In the fourth quarter alone, these institutions added 333 tons to their reserves.
This trend reflects the growing inclination of central banks to strengthen their gold holdings as a hedge against currency volatility, inflation, and geopolitical risks. Nations such as China, Russia, Turkey, and India topped the list of buyers countries that in recent years have turned to precious metals to diversify their foreign reserves.
Investments: A Strong Comeback in the Gold Market
The investment sector also saw a notable revival in 2024, with gold demand in this segment rising by 25% compared to the previous year, totaling 1,180 metric tons. This substantial increase, especially in the second half of the year, coincided with a renewed interest from Western investors.
In particular, exchange traded funds (ETFs) added 19 tons of gold in the fourth quarter of 2024, marking the second consecutive quarter of net inflows. This rebound was largely driven by interest rate cuts from several central banks and growing concerns over a potential economic slowdown in major global economies. Meanwhile, demand for gold bars and coins remained strong, with consumption reaching 1,186 tons, nearly unchanged from 2023.
This consistency shows that retail investors continue to regard gold as a safe and reliable asset.
Jewelry Industry Faces Challenges Amid High Gold Prices
In contrast to other sectors, gold demand in the jewelry industry declined under the pressure of high prices. Annual gold consumption in this segment fell by 11%, reaching 1,877 metric tons.
This drop was particularly evident in China, where demand plunged 24% year on year.
However, the Indian market showed more resilience, recording only a 2% decline, reflecting the country's strong cultural tradition of purchasing gold during special occasions and as a form of family investment.
Other Asian markets also experienced moderate decreases, but overall, high prices remain a major obstacle to growth in consumer demand.
Technology: A New Driver of Gold Consumption
The technology sector demonstrated strong performance in 2024, with gold demand reaching 326 metric tons, up 7% from 2023. In the fourth quarter, gold usage in technology hit its highest level since 2021, driven by the rapid advancement of AI, high end electronics, and semiconductors.
Given the continued rise in cutting edge tech development, this segment is expected to remain a key driver of gold consumption in the coming years.
Global Supply: Modest Growth Amid Surging Demand
While gold demand surged in 2024, global supply grew by only 1%, reaching 4,794 metric tons. This limited growth was due to a combination of increased mine production and recycling activity. Nonetheless, the gap between supply and demand remains a potential concern for the gold market, especially if the upward trend in demand continues.
Outlook for 2025: Gold’s Continued Dominance in an Uncertain World
According to Louise Street, Senior Markets Analyst at the World Gold Council:
“In 2024, gold returned to the spotlight. Prices hit forty new records throughout the year, though demand patterns were uneven. Central banks made strong purchases early in the year, slowed down mid year, and surged again in the final quarter. Meanwhile, Western investors re-entered the market in the second half, and strong investment flows from Asia further boosted demand. Our forecast for 2025 is that central banks will remain a key force in the market, while ETF investors may become more active if interest rates decline. On the other hand, jewelry demand is likely to remain subdued. Overall, geopolitical and economic uncertainty will continue to make gold a favored safe haven and risk hedging asset.”
Conclusion: Gold, a Smart Choice in a Volatile Era
The year 2024 marked a turning point for the gold market. Unprecedented demand levels, renewed investor interest, and strong central bank purchases all underscored gold’s strategic role in the global economy.
In a world grappling with inflation, recession risks, currency volatility, and geopolitical shifts, gold has emerged more than ever as a reliable safe haven asset. Looking ahead, this momentum is expected to continue in 2025, with gold demand likely to remain robust and resilient.