Gold demand hits four-year high as central banks load up - WGC

Central bank buying of gold accelerated by 54% year on year to 333 tons in the final quarter of 2024, when Trump won the U.S. election.

World Gold Council (WGC) data showed on Friday that total gold demand rose 1% in 2024 to the highest since 2022, driven by a surge in central bank buying and a recovery in investment, while jewellery consumption fell sharply.

Central banks bought 1,044.6 tonnes of gold last year, down slightly from a record 1,136.2 tonnes in 2023, but still among the highest levels in decades, the WGC said in its Trends in Gold Demand report.

In the final quarter of 2024, when Trump won the U.S. election, buying by central banks accelerated by 54% year on year to 333 tons, the WGC calculated, based on reported purchases and an estimate of unreported buying.

Overall investment demand for gold, including bars, coins and exchange-traded funds (ETFs), rose 25% to a four-year high of 1,180 tons, mainly because outflows from physically-backed gold ETFs dried up for the first time in four years.

Indicating a major shift in appetite for different products, investment demand for bars rose 10%, while coin buying fell 31%.

“In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates,” WGC senior markets analyst Louise Street, said.

“Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk.”

Total gold demand, excluding opaque OTC trading, rose 1% to 4,553.7 tons last year, the highest since 2022, the WGC said. It estimates that OTC demand fell 7% due to a slump in the final quarter of the year as profit-taking offset persistent demand from high-net-worth investors.

Gold jewellery consumption, the biggest category of physical demand, fell 11% in 2024, while mine production was steady and recycling rose 15%.

The WGC expects jewellery demand to remain under pressure and recycling to rise further this year due to high prices.