World Gold Council’s Q3 2024 Report Reveals Surge in Global Gold Demand

The World Gold Council’s Q3 2024 Gold Demand Trends report highlights a significant surge in global gold demand, surpassing $100 billion for the first time, driven by strong investment activity and rising gold prices. The report provides comprehensive insights into key demand drivers, emerging market trends, and the outlook for the remainder of the year.

The following are key findings from the Report:

1. Total Gold Demand

Total gold demand increased by 5% year-on-year, reaching 1,313 tons in Q3 2024. This marks a new record for the third quarter, underscoring the growing global interest in the precious metal.

2. Investment Demand

Global investment demand more than doubled year-on-year, rising to 364 tons—a key driver behind the overall surge in demand. The main catalyst for this growth was gold exchange-traded fund (ETF) purchases, particularly from Western investors. Notably, Q3 saw a net addition of 95 tons in gold ETFs, the first positive result since Q1 2022, signaling a rebound in investor confidence.

3. Jewelry Demand

Jewelry demand experienced a 12% decline in volume, largely due to the rising price of gold, which averaged $2,474 per ounce during the quarter. However, the value of jewelry consumption rose by 13%, suggesting that while consumers purchased less in terms of volume, they were willing to spend more per piece, likely due to the enduring allure of gold as a store of value.

4. Central Bank Purchases

Central bank gold purchases slightly slowed to 186 tons in Q3. Despite this dip, the year-to-date total reached 694 tons, in line with the figures seen in 2022. Central banks continue to view gold as a strategic asset, providing stability and diversification in their reserves amid global economic uncertainties.

5. Technology Demand

Demand for gold in technology applications grew by 7% year-on-year, bolstered by the electronics sector and the expanding role of artificial intelligence (AI) in driving technological innovations. Gold’s high conductivity and reliability make it indispensable in advanced electronic devices.

6. Gold Supply

On the supply side, gold production saw a 5% year-to-year increase, with mine production rising by 6% and gold recycling up by 11%. This increase in supply is partially attributed to improved mining operations and higher gold recovery rates from recycled materials.

Market Insights: Factors Influencing Demand

Louise Street, Senior Markets Analyst at the World Gold Council, provided valuable insights into the broader market dynamics. According to Street, the strong investment activity and over-the-counter trading were pivotal in driving gold demand and contributing to its higher prices. A notable driver was the growing phenomenon of FOMO (Fear of Missing Out), as investors anticipated future interest rate cuts and sought out gold as a safe-haven asset amid geopolitical instability and ongoing economic uncertainty.

Gold’s historical role as a hedge against inflation and financial market volatility continues to resonate with investors seeking to protect their wealth in a challenging macroeconomic environment.

Outlook for the Remainder of 2024

Looking ahead, the outlook for gold remains positive, with continued robust investment flows likely to sustain demand and support elevated gold prices. However, the high-price environment presents challenges for consumers, particularly in the jewelry sector, where price sensitivity may curb some purchases.

Moreover, geopolitical risks and the broader economic environment—such as potential interest rate movements by central banks and the pace of recovery from the COVID-19 pandemic—are expected to play significant roles in shaping gold demand over the coming months.

Despite these challenges, analysts expect that gold will maintain its appeal as a hedge against inflation and a reliable store of value, ensuring continued interest from investors and central banks alike.