Gold has surged to record-breaking demand levels in 2024, largely driven by central banks and private investors seeking stability amid global geopolitical and economic uncertainties. Analysts predict that gold prices could soon surpass $3,000 per ounce in 2025, continuing their upward trajectory.
The gold market has achieved its longest rally since the early 2000s, hitting all-time highs for eight consecutive weeks. Currently, spot gold is trading at $2,935.80 per ounce, marking an impressive 2% increase from last week. As the market continues to surge, the $3,000 threshold is expected to be surpassed imminently.
Key Trends in Gold Demand for 2024:
Record-Setting Demand: Global gold demand reached a new peak in 2024, with a 1% year-on-year increase, totaling 4,974.5 metric tons, valued at $382 billion. This marks the highest demand on record, according to the World Gold Council (WGC).
Strong Central Bank Purchases: Central banks remained aggressive in their gold buying strategies, purchasing over 1,000 metric tons for the third consecutive year. Though purchases dipped slightly by 1%, a significant surge in the fourth quarter saw central bank purchases reach 333 tons.
Investment Demand on the Rise: A remarkable 25% surge in investment demand saw gold ETFs hit a four-year high, accumulating 1,180 tons by the end of 2024. This surge is reflective of the growing trust in gold as a safe-haven asset amidst global instability.
Jewelry Sector Facing Decline: Despite the booming gold market, the jewelry sector has seen a decline of 11%, with demand falling to 1,877 tons. High gold prices and diminished consumer purchasing power, especially in China, are key factors behind this drop. While Indian demand saw only a slight dip of 2%, Chinese demand fell by a substantial 24%.
Technological Demand Upturn: The technology sector also experienced growth in demand, with a 7% increase to 326 tons. This growth was driven by rising applications of gold in artificial intelligence and electronics.
2025 Outlook: Looking ahead to 2025, central banks and ETF investors are expected to continue driving demand for gold. Economic uncertainties are likely to keep gold’s appeal strong as a risk hedge. However, the high price of gold is expected to continue to pressure the jewelry market, affecting consumer behavior and purchasing patterns.
Gold’s position as a store of value is undeniable, maintaining its intrinsic worth across centuries and around the globe. With rising geopolitical tensions, particularly with the potential return of Donald Trump to power in the U.S., demand for gold as a safe-haven asset is expected to increase, further driving its price upward.
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