Global Gold Demand Reaches Record $100 Billion in Q3 2024
World Gold Council’s Q3 2024 Report Highlights Historic Milestone for the Gold Market
Total Gold Demand Surges to Record High
Gold demand for Q3 2024 reached 1,313 tonnes, marking a 5% year-on-year increase. This is the highest quarterly demand ever recorded, reflecting strong interest across various sectors, particularly investment, technology, and central banks.
Investment Demand Soars, Driven by Gold ETFs
A major contributor to this growth was the surge in investment demand, which more than doubled to 364 tonnes in Q3. Gold exchange-traded funds (ETFs) played a central role in this surge, adding 95 tonnes in holdings, signaling the first positive quarter since early 2022. Western investors were particularly active in the ETF market, seeing gold as a safe haven amidst rising geopolitical tensions and economic uncertainties.
Central Bank Demand Remains Stable
Although slightly down from previous quarters, central banks continued their steady purchasing of gold, with 186 tonnes bought in Q3. This brings the year-to-date total to 694 tonnes, aligning with the same period in 2022. Central banks remain committed to gold as a stable reserve asset, providing a strong buffer against global financial risks.
Jewelry Demand Declines Amid High Prices
While jewelry demand fell 12% by volume in Q3, largely due to record-high gold prices averaging $2,474 per ounce, the value of jewelry purchases increased by 13%, suggesting that consumers are still willing to buy high-value pieces, despite the cost. This was particularly evident in Western markets.
India’s Gold Demand Resilient
In contrast to Western markets, India’s gold demand showed remarkable resilience. The import duty cut in India helped sustain demand for both gold jewelry and bar/coin purchases, even amid record prices. India’s gold market remains a key player in global demand.
Technology Sector Drives Gold Consumption
The technology sector saw a 7% year-on-year increase in gold demand, driven by the electronics industry’s need for high-performance materials. Artificial intelligence (AI) applications, in particular, are fueling this growth as electronics manufacturers increasingly rely on gold for advanced components.
Strong Gold Supply to Meet Growing Demand
Global gold supply increased by 5% year-on-year, largely due to a 6% rise in mine production and an 11% increase in recycling. This increase in supply has helped to meet the growing demand for gold across investment, technology, and jewelry sectors.
Future Outlook: Continued Investment Interest
Looking ahead, experts anticipate continued strong demand for gold, particularly driven by investment interest. With the potential for interest rate cuts and gold’s appeal as a safe-haven asset amidst global uncertainty, demand is expected to remain elevated. However, high prices may continue to challenge consumer markets, particularly in jewelry and bar/coin sectors.
Conclusion:
As we move into the final quarter of 2024, gold demand is poised to stay strong, driven by ongoing investment interest, central bank purchases, and technological advancements. While high prices may dampen demand in some sectors, particularly jewelry, the overall outlook for gold remains positive, supported by its enduring status as a safe haven and critical material in advanced technology.
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