- The World Gold Council announced that last year's global gold demand reached a record high of 4,974 tons.
- The geopolitical instability led to continued gold purchases by central banks and increased demand for gold ETFs.
- Demand for gold bullion and coins in China and India remained strong, while demand for gold jewelry decreased due to rising prices.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Increase Driven by Central Bank Purchases and Gold ETF Investment Demand
Higher Than 2023 Amid Geopolitical Instability Due to Two Wars
Gold Jewelry Demand Declines Due to Price Surge
Global gold demand reached a new record last year, driven by strong purchases from central banks and investment demand.
On the 5th (local time), the World Gold Council (WGC) announced in its annual report that global gold demand totaled 4,974 tons last year. This is a slight increase from the 4,899 tons recorded in 2023, a year marked by heightened geopolitical instability due to the ongoing Ukraine-Russia war and the Israel-Hamas conflict.
The WGC analyzed that the increase in gold demand was due to growing geopolitical and economic uncertainties worldwide. It is expected that this trend will continue this year, with gold trading likely to increase.
Central banks purchased 1,045 tons of gold last year, maintaining a strong buying pace for the third consecutive year with over 1,000 tons. The Poland National Bank was the largest buyer among central banks, adding 90 tons to its reserves. The Turkey Central Bank purchased 75 tons, followed by the India Central Bank. However, demand for gold jewelry decreased due to the price surge, leading to reduced transactions.
The report stated, "Central banks are expected to maintain their leadership, with gold ETF investors joining the competition." However, the WGC noted that "with rising prices and an economic slowdown weakening consumer purchasing power, demand for jewelry gold is expected to decrease while supply from mines continues to increase."
Central banks have been increasing net gold purchases for 15 years, with the annual purchase volume nearly doubling since the war in Ukraine began in 2022.
Gold prices have risen 27% over the past year as investors sought safe havens amid wars in Ukraine and the Middle East, and central banks turned to interest rate cuts.
Due to the price increase, gold jewelry consumption fell by 11% to 1,877 tons. China accounted for most of the decline, while India emerged as the largest consumer of gold jewelry.
John Reed, the WGC's chief market analyst, stated, "While China's demand for gold jewelry has significantly decreased, investment demand has increased."
Investment in gold is primarily through gold exchange-traded funds (ETFs), which surged 25% last year to a four-year high of 1,180 tons.
Demand for gold bullion and coins remained robust, supported by strong demand from China and India.
The report noted, "Chinese investors have turned to gold investment due to uncertainties in the Chinese economy and poor stock and bond returns." In India, gold demand increased after the government reduced the gold import duty from 15% to 6% in July.
Over-the-counter (OTC) transactions, conducted directly among high-net-worth individuals, remained at similar levels to the previous year.
According to FactSet data, gold futures traded on the New York Mercantile Exchange (NYMEX) rose to $2,875.8 per ounce on the 5th.
Kim Jung-ah, Guest Reporter kja@hankyung.com

Korea Economic Daily

hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.PiCK News
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