Record-breaking gold demand in 2024, driven by central banks, investor interest
Growth gold bar financial investment with a stock diagram on a 3D profit graph. (Adobe Stock Photo)
The World Gold Council (WGC) has reported that global gold demand, including over-the-counter (OTC) transactions, reached a record high in 2024, increasing by 1% to 4,974.5 tons.
The rise was driven by heightened investment interest and central bank acquisitions, particularly in the fourth quarter of the year.
Central banks continue gold-buying spree
A key factor behind the surge was the aggressive purchasing by central banks. For the third consecutive year, central banks bought over 1,000 tons of gold.
The National Bank of Poland emerged as the largest buyer, adding 90 tons to its reserves.
According to WGC estimates, central bank gold purchases in the final quarter of 2024 skyrocketed by 54% compared to the previous year, reaching 333 tons.
Analysts link this increase to financial and geopolitical uncertainties following Donald Trump’s victory in the U.S. presidential elections.
Investors turn to gold amid market volatility
Amid escalating global risks and the U.S. Federal Reserve’s decision to cut interest rates, investors turned to gold as a safe-haven asset. Spot gold prices surged by 27% in 2024, marking the highest increase since 2010.
On Tuesday, prices hit an all-time high as market demand soared following China’s decision to impose retaliatory tariffs on the U.S.
Investment in gold-backed exchange-traded funds (ETFs) also surged after four years of continuous outflows, contributing to a 25% rise in overall investment demand.
Meanwhile, demand for gold bars increased by 10%, whereas coin purchases plummeted by 31%, reflecting a shift in investor preferences.
2025 outlook: Central banks to remain dominant buyers
WGC senior market analyst Louise Street predicts that central banks will continue to lead gold purchases in 2025. “With low but volatile interest rates, we expect gold ETF investors to play a more significant role in the market,” she stated.
She further emphasized that geopolitical and macroeconomic uncertainties will remain dominant themes in 2025, reinforcing gold’s appeal as a store of wealth and a hedge against risk.
Jewelry demand declines as recycling activity rises
While overall gold demand set new records, jewelry consumption saw a notable decline of 11% in 2024, pressured by soaring prices.
Meanwhile, gold recycling activity surged by 15% as high market prices encouraged sellers to capitalize on profits.
WGC anticipates that jewelry demand will remain under pressure in 2025, while recycling levels are expected to increase further due to sustained high gold prices.
Despite a temporary dip in fourth-quarter OTC trading—caused by profit-taking from high-net-worth investors—WGC reported that total gold demand, excluding OTC activity, rose by 1% to 4,553.7 tons, marking the highest level since 2022.
