WGC: Demand for gold increased amid high prices and weak economic growth
New Delhi| Global gold demand remained broadly stable in 2024, registering a modest one percent increase over the previous year, to 4,974 tones. The World Gold Council (WGC) said this in a report released on Wednesday. The report said that the main reason for increasing demand is the decline in demand for jewellery due to high prices, weak economic growth and global uncertainties. According to WGC’s 2024 Gold Demand Trends Report, total gold demand in 2023 was 4,945.9 tones. According to the report “the year 2024 recorded strong demand in the first and fourth quarters”.
“Western investors showed significant interest in gold in the second half of the year”, Lewis Street, senior market analyst at WGC, said in a statement. This added to global gold ETF (exchange traded fund) flows in the third and fourth quarters.. He said that this situation has arisen due to global uncertainties including the beginning of interest rate cuts by many central banks and increasing tensions in the US presidential elections and the Middle East. For the third consecutive year, central banks continued to buy gold and bought 1,044.6 tones in 2024, according to the report. In 2023, central banks had purchased 1,050.8 gold. Poland’s national bank bought the most gold, 90 tons.
According to the report, procurement increased significantly in the fourth quarter, reaching 333 tons. Global investment demand for gold rose 25 percent year-on-year to 1,179.5 tons in 2024. This is the highest level in four years. In 2023, the figure was 945.5 tones. The reason for the increase in demand for gold is the increase in purchases of gold ETFs in the second half of 2024. Gold ETFs increased by 19 tones in the last quarter of 2024. Meanwhile, demand for bars and coins remained largely stable at 1,186 tones in 2024, compared to 1,189.8 tones the previous year.
The report said demand in the jewellery sector has been dampened by higher prices, reducing annual consumption by 11 per cent to 1,877.1 tones compared to 2,110.6 tones in 2023. The decline was mainly due to weakness in China (a 24 percent year-on-year decline), although Indian demand remained resilient, declining only 2 percent in a record high price environment in 2024.
WGC Regional Chief Executive Officer (India) Sachin Jain told PTI, ‘‘ Demand for jewellery fell by 11 per cent mainly due to higher gold prices and softening economic growth in several markets, including China. The climate for demand for Chinese jewellery in 2024 was quite challenging, influenced by weak consumer confidence amid declining income growth and rising gold prices.’’ The technology sector saw its strongest quarter since the fourth quarter of 2021, with demand reaching 84 tones compared to the previous year. Slight increases in the amount of gold used in artificial intelligence (AI) and electronics contributed to a 7 percent year-on-year increase, reaching 326.1 tons compared to 305.2 tons in 2023.
