Global Gold Demand Flat in 2024: WGC Report

Mumbai, Feb 5 (PTI) Global gold demand remained largely flat in 2024, registering a marginal 1 per cent growth from the previous year to 4,974 tonnes, mainly due to a decline in jewellery demand following high prices, softer economic growth and heightened global uncertainties, the World Gold Council (WGC) said in a report on Wednesday.

The total gold demand stood at 4,945.9 tonnes in 2023, according to WGC's 2024 Gold Demand Trends report.

"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 quarter.

"Likewise, 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 (Exchange-traded Fund) flows into positive territory in the third and fourth quarters," WGC Senior Markets Analyst Louise Street said in a statement.

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, she added.

According to the report, for the third year in a row, the central banks continued to buy gold at the same pace buying 1,044.6 tonnes in 2024, compared to 1,050.8 tonnes in 2023, led by the National Bank of Poland buying 90 tonnes.

The buying was ramped up significantly in the fourth quarter, reaching 333 tonnes, according to the report.

Global investment demand increased 25 per cent year-on-year to 1,179.5 tonnes - a four-year high - compared to 945.5 tonnes in 2023, driven by a revival in gold ETF demand in the second half of 2024.

Gold ETFs added 19 tonnes in the last quarter of 2024, marking two consecutive quarters of inflows for the asset class.

Meanwhile, demand for bars and coins remained largely stable in 2024 at 1,186 tonnes, compared to 1,189.8 tonnes in the previous year.

The report stated that high prices dampened the demand in the jewellery sector, with annual consumption decreasing 11 per cent to 1,877.1 tonnes compared to 2,110.6 tonnes in 2023.

The decline was driven largely by weakness in China (down 24 per cent year-on-year), though Indian demand remained resilient, dropping just 2 per cent in 2024, in a record-high price environment.

"The jewellery demand dropped by 11 per cent mainly due to high gold prices and softer economic growth in many markets, including China. The environment for Chinese jewellery demand was very challenging throughout 2024, hit by a combination of poor consumer confidence amid declining income growth and surging gold prices," WGC Regional CEO, India, Sachin Jain told PTI.

The technology sector saw its strongest quarter since the fourth quarter of 2021, with demand reaching 84 tonnes compared to .. tonnes in the previous year.

A modest rise in gold volumes used in artificial intelligence (AI) and electronics contributed to a 7 per cent year-on-year increase, reaching 326.1 tonnes compared to 305.2 tonnes in 2023.

"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 added.