The allure of gold remains unwavering as global demand for the precious metal surged 3% year-on-year to 1,238 tonnes in the first quarter of 2024, according to the World Gold Council’s latest Gold Demand Trends report. This marks the strongest first-quarter demand since 2016, defying the record-high average price of $2,070 per ounce during the period.
Healthy investment, persistent buying by central banks, and higher demand from Asian buyers helped drive the gold price to a record quarterly average of USD 2,070 per ounce, 10% higher year-on-year and 5% higher quarter-on-quarter.
Central banks continued their ambitious accumulation of gold reserves, adding a staggering 290 tonnes to their official holdings. Investment demand for gold bars and coins also remained buoyant, rising 3% annually to 312 tonnes, mirroring levels seen in the previous quarter.
Global jewellery demand remained resilient, despite record-high prices, only falling 2% year-on-year. Demand in Asia countered decreases in both Europe and North America. Furthermore, the AI boom in the electronics sector drove a 10% annual increase in gold demand from the technology sector.
On the supply side, mine production hit a record 893 tonnes in the first quarter, up 4% from the prior year. Recycling activities also witnessed a substantial 12% yearly jump to 351 tonnes as some investors cashed in on the high prices.
“The gold price has climbed to all-time highs since March, defying traditional headwinds like a strong US dollar and persistently high interest rates,” said Louise Street, Senior Markets Analyst at the World Gold Council. “Factors such as heightened geopolitical risks, macroeconomic uncertainty, unwavering central bank demand, robust OTC investment, and increased net buying in derivatives have fueled this surge.”
India, a major consumer of gold, witnessed an 8% year-on-year increase in demand to 136.6 tonnes during the first quarter.
Street expressed optimism for gold’s performance in 2024, stating, “Should the price stabilize in the coming months, price-sensitive buyers may re-enter the market, and investors will continue to seek gold as a safe-haven asset amid uncertainties surrounding rate cuts and election results.”
(Inputs from ANI)
