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Informist, Wednesday, Feb. 5, 2025

 

 

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--WGC: Global gold demand in 2024 at 4,974.5 tn, up 1% from 2023
--WGC: Global gold demand in Oct-Dec at 1,297.4 tn, up 1% on year
--CONTEXT: WGC releases Gold Demand Trends report for 2024, Oct-Dec
--WGC: Gold prices in 2024 averaged $2,386.2/ounce, up 23% on year
--WGC: Gold prices in Oct-Dec averaged $2,663.4/ounce, up 35% on year
--WGC: Gold demand by global central banks in Oct-Dec at 333 tn, up 54% YoY
--WGC: Global central banks bought 1,044.6 tn gold in 2024, down 1% from 2023
--WGC: Oct-Dec global gold ETF inflow at 18.6 tn vs 55.4 tn outflow yr ago
--WGC: Global gold ETF outflow in 2024 at 6.8 tn vs 244.2 tn a year ago
--WGC: Global gold demand for jewellery in Oct-Dec at 547.1 tn, down 12% YoY
--WGC: Global gold demand for jewellery in 2024 at 1,877.1 tn, down 11%
--WGC: Global demand for gold bars, coins in Oct-Dec at 325.4 tn, up 3%
--WGC: Global demand for gold bars, coins in 2024 at 1,186.3 tn vs 1,189.8 tn
--WGC: Global investment demand for gold in Oct-Dec 344 tn, up 32% on year
--WGC: Global investment demand for gold in 2024 at 1,179.5 tn, up 25%
--WGC: Global gold supply in Oct-Dec at 1,297.4 tn vs 1,286.5 tn year ago
--WGC: Global gold supply in 2024 at 4,974.5 tn vs 4,945.9 tn in 2023
 

 

MUMBAI – Global demand for gold rose 23% to a record high of 4,974.5 tonnes in 2024 due to robust purchases by central banks and investors, the World Gold Council said in its Gold Demand Trends report released Wednesday. This was mainly due to a 1% year-on-year rise in demand during Oct-Dec to a record high of 1,297.4 tonnes, it said.

 

"Demand in value terms reached previously unseen levels," the global body said. The combination of record gold prices and volumes led to a value of $111 billion in Oct-Dec, which took the overall demand value in 2024 to the highest-ever of $382 billion, according to the report.

 

Central banks continued to buy gold at 'an eye-watering pace' with the purchases exceeding 1,000 tonnes for the third year in a row. In Oct-Dec, central banks added 333 tonnes of precious metal, which took the annual demand from central banks to 1,045 tonnes. However, on a yearly basis, demand from central banks fell nearly 1% from 1,050.8 tonnes in 2023.

 

In 2024, demand for bars and coins was at 1,186 tonnes, slightly down from 1,189.8 tonnes in the previous year. Demand for bars and coins during Oct-Dec was 325.4 tonnes, up from 315.2 tonnes in the corresponding period a year ago. Demand from the technology sector added to the global total, the WGC said, adding that the demand grew by 7% in 2024 to 326.1 tonnes. The reason for the demand from the technology sector is largely driven by continued growth in adoption of artificial intelligence.

"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 Q1 before moderating through the middle of the year and finishing with a strong Q4," Louise Street, senior market analyst at WGC, said.

 

The average price of gold on the London Bullion Market in 2024 hit a record $2,386.2 per ounce, up 23% from 2023. During Oct-Dec, the average price of gold was also at a record high of $2,663.4 per ounce, rising 35% from the corresponding period last year.

 

Annual investment reached a four-year high of 1,180 tonnes in 2024, 25% higher than the previous year. "Increased demand for gold ETFs (exchange-traded funds) fuelled the rise in overall investment, notably in the second half of the year as US listed funds attracted inflows."  Global investment demand for gold in Oct-Dec was up 32% on year at 344 tonnes. 

 

The 25% growth was also the strongest annual growth since 2020. This was concentrated in the second half of the year as rate cuts, geopolitical uncertainty, and gold's price performance attracted inflows into gold exchange traded funds, the report said.

 

Moving to gold exchange traded funds, 2024 is the first year since 2020 in which holdings were essentially unchanged, in contrast to the heavy outflows during the prior three years, according to the report. In 2024, global gold ETFs saw outflows of 6.8 tonnes, compared to 244.2 tonnes a year. However, during Oct-Dec gold ETFs saw inflows of 18.6 tonnes, compared with outflows of 55.4 during the same period last year.

 

"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 (West Asia)," Street said.

 

However, over-the-counter investment fell 7% to 420.7 tonnes in 2024 due to a sharp slowdown in the last quarter. "Demand from high net worth investors remained healthy, but contrasted with profit taking in some areas of OTC investment," the WGC said.

 

Annual consumption of gold jewellery declined 11% to 1,877 tonnes as consumers could only afford to buy in lower quantities due to "rip-roaring price", according to the report. Nonetheless, spending on gold jewellery jumped 9% to $144 billion.

 

SUPPLY

Globally, supply of gold in 2024 was up 1% at 4,974.5 tonnes, and that during Oct-Dec also up 1% on year at 1,297.4 tonnes. Production from mines in 2024 was at 3,661.2 tonnes, compared to 3,644.1 tonnes in the previous year.

 

Supply of recycled gold in 2024 was at 1,370 tonnes, up 11% from the previous year. In Oct-Dec, the supply of recycled gold was up 15% on year at 358.8 tonnes. "The trend is rising and tonnage is expected to increase again in 2025 on the back of slowing global economic growth, a high gold price level, and a slight reduction in the geopolitical risk premium that's been key to dampening supply for the past two years," the global body said.

 

OUTLOOK

Central banks and ETF investors are likely to drive demand with economic uncertainty supporting gold's role as a risk hedge, WGC said, but added that it would keep pressure on jewellery demand.

 

"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.  End

 

US$1 = INR 87.07

 

Reported by J. Navya Sruthi

Edited by Ashish Shirke

 

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