According to the World Gold Council's report in the first week of February 2025, global gold demand reached its highest level on record in 2024, driven by consistent central bank acquisitions and increased investment activity.
The total annual gold demand, including over-the-counter transactions, rose to 4,974 tonnes, surpassing previous records. The report from the World Gold Council (WGC) also states that the total value of gold demand reached $382 billion, with prices hitting 40 record highs throughout the year.
Central banks worldwide continued to be a significant driver of demand, purchasing over 1,000 tonnes for the third consecutive year, with buying activity intensifying in the fourth quarter. Gold investment saw significant growth in 2024, with global investment demand increasing by 25% compared to the previous year, reaching 1,180 tonnes.
There was also a resurgence in gold-backed exchange-traded funds (ETFs), with net inflows for two consecutive quarters. Demand for bars and coins remained constant at 1,186 tonnes, similar to the levels in 2023. However, the high price environment negatively affected jewelry consumption, which declined by 11% to 1,877 tonnes.
This decline was most notable in China, where demand decreased by 24% compared to the previous year. In contrast, India's gold jewelry market remained relatively strong, with only a 2% decrease despite the high prices. In the technology sector, gold demand experienced its strongest quarter since late 2021, reaching 84 tonnes in Q4.
The increased utilization of gold in artificial intelligence (AI) and electronics contributed to a 7% annual increase, bringing the total technology-related demand to 326 tonnes. Meanwhile, the total gold supply increased by 1% compared to the previous year, reaching a record 4,794 tonnes, supported by higher mine production and recycling.
Looking ahead, the World Gold Council predicts that central banks will continue to drive demand in 2025, and ETF investors may play a more significant role if interest rates decrease. However, the high prices and economic pressures may further limit jewelry demand. Geopolitical uncertainties and macroeconomic factors, such as central bank policies and elections, are expected to shape the future of the gold market. Currently, an ounce of .999 fine gold is trading at $2,873.
Louise Street, the senior markets analyst at the World Gold Council, commented, "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." The WGC analyst added that jewelry weakness is likely to continue due to high gold prices and weak economic growth. Geopolitical and macroeconomic uncertainties are expected to support the demand for gold as a store of wealth and a hedge against risk.