The central bank broke into the gold market in the last three months of last year, playing a key role in metals (doubled as a currency), and is now at an all-time high of $2,865 per ounce, up 3.7% in a week, 41% rose 3.7% in the past 12 months.
Industry Hall Group World Gold Council (WGC) said overall gold demand reached an annual record of 4974.5 metric tons last year, with a total demand increasing by 1% in 2023 at 4945.7t.
Gold bars are on display at a South Korean bank. Jung Yeon JE/AFP via Getty Images.
AFP via Getty Images
The rise in gold prices has seen a major change in the composition of the market, and jewelry demand has flattened as prices continue to rise.
Traditionally, jewelry demand is one of the main markets of gold as buyers are squeezed out of the market, with jewelry demand falling 11%.
“Gold jewelry is a clear outlier,” WGC said. “Consumption fell 11% to 1877T per year because consumers can only afford to buy at lower quantities.”
Still, the WGC said spending on gold jewelry jumped 9% to $144 million as shoppers bought gold or low-level gold while paying more money.
Last year, central banks and private investors dominated the gold market, viewing metals as a defense against inflation and as an asset class separate from government-controlled currencies.
“Central banks continue to vacuum gold at a breathtaking rate, with their purchases of more than 1,000 tons in the third consecutive year, accelerating sharply to 332.9t in the fourth quarter,” WGC said.
The purchase outbreak in the last three months of last year represents a 53.5% increase in the 216.8T acquisition in the fourth quarter of 2023.
ETF up to four years
The WGC said annual investment in gold by individual buyers and exchange-traded funds (ETFs) rose to a four-year high of 1,180t, a 25% increase last year.
“Gold ETFs have had a big impact,” WGC said, adding that 2024 was the first year since 2020, and that holdings have basically not changed compared to the previous year. “
“The year-round (gold) bar and coin demand is consistent with 2023 (1186t).
“The composition has changed as bar investments grow and coin purchases decrease.”
Gold’s technology applications include everything from battery cell phones to satellites, and WGC continues to grow as demand grows 7% to 21T, attributes some growth to the expansion of artificial intelligence (AI).
